Relevance and Faithful Representation (Reliability) of Annual and Semi-Annual Financial Statements; A trade-off

Abstract

This study aims to shed light on the inconclusiveness of attaining attributes of relevance and reliability of reported accounting information in financial statements. For this reason, the degree of relevance and reliability of annual and semi-annual financial statements is examined. The sample consists of 321 manufacturing companies in the form of panel data from 2012 to 2019.The study shows a trade-off between relevance and reliability between annual and semi-annual financial statements. It is the first effort to detect any trade-off in relevance and reliability between semi-annual and annual financial statements. Additionally, this study measures the quality dimensions as presented in the conceptual framework of IFRS and highlights the conflict between existing methods measuring reliability with the IFRS conceptual framework's rationality.

Public accountant professional skepticism behavior in improving audit quality: A path analysis

“…Accountability signifies auditors' ability to complete audit tasks efficiently and punctually, with confidence in the thoroughness of their work, as it undergoes careful review by superiors and can be justified to employers. Additionally, studies by Barzideh and Kheirollahi (2012), Hurley et al (2019), and Kythreotis and Soltani (2023) have affirmed that auditors exhibiting accountability tend to fulfill audit requirements promptly in accordance with auditing standards. As a result, the quality of audit work is enhanced, leading to an overall improvement in audit quality.…”

“…The primary focus of this study is to delve into the issue of audit quality within public accounting firms, particularly in addressing trust concerns regarding the reliability of audit outcomes (Persellin et al, 2019). Such insights are pivotal for informed business decisionmaking (Kythreotis & Soltani, 2023) and for bolstering confidence in financial statement accuracy through empirical evidence of audit quality (Werner et al, 2021;Hutabarat et al, 2022), aligning with professional standards for financial statement fairness. Factors influencing audit quality stem from behavioral responses both internally and externally (Gordon & Graham, 2010), alongside the auditor's sense of responsibility for audit outcomes (Kim et al, 2015) and indicators of skepticism and due professional care (Louwers et al, 2008).…”