3 years ago

an investigation of the usefulness of accounting information for ...

an investigation of the usefulness of accounting information for ...


METHODOLOGY In order to investigate the views of financial analysts in respect of accounting information, a list of information has been derived from one of the regulations set out by FSC in Mauritius which is from the Companies Act 2001. The list of accounting information does not only include mandatory disclosures but also incorporates voluntary information. The list of voluntary information has been derived from The Financial Accounting Standards Board (FASB, 2001) study based on “Improving Business Reporting: Insights into Enhancing Voluntary Disclosures”. This study has been carried out by the steering committees that are responsible to provide the framework of voluntary disclosures. The FASB’s interest in voluntary disclosure is consistent with Baginski et al., (2004), a recent policy’s maker, advocated for increased voluntary forward-looking disclosure A list of 70 items of accounting information is taken out from the checklist of IAS 1 and the lists provided by FASB. This list of items of information was grouped into eight categories: Income statement information, Statement of financial position information, Cash flow information, Stockholders Information, Supplementary information, Information regarding accounting policies, General information and Voluntary information. The questionnaire consists of four sections. The first section includes a covering note and a set of instructions. The second section of the questionnaire deals with the usefulness of financial statement information. The third section seeks details about the profile of the respondents. The final section consists of open-ended questions. The online questionnaire was pilot tested on three people and their feedback was used to revise and improve the research instrument. This study adopts a descriptive analysis approach while investigating the opinions of brokers and financial analysts regarding a list of items of accounting information. An online questionnaire is used as the research instrument. A total of 25 brokers and 35 financial analysts were interviewed. A factor analysis is also carried out to find out the most important components of each category of accounting information. 6

RESULTS AND DISCUSSION Statements Mean SD M / V Q / NQ H / F Consolidated income statement 4.23 0.57 M Q H Costs of goods sold 3.60 1.00 M Q H Sales or revenue 4.27 0.58 M Q H Selling, general and administrative expenses 3.33 0.84 M Q H Operating income 4.10 0.61 M Q H Foreign exchange gains / losses 3.63 0.89 V Q H Income tax expense 3.60 0.86 M Q H Minority Interest 3.10 0.84 M Q H Net income reported 4.10 0.61 M Q H Total comprehensive income 4.27 0.69 M Q H Liabilities 4.30 0.60 M Q H Retained earnings 4.50 0.57 M Q H Cash and cash equivalents 3.87 0.82 M Q H Accounts receivables 4.00 0.74 M Q H Inventories 3.97 0.72 M Q H Current Assets 4.30 0.47 M Q H Non-current Assets 4.43 0.50 M Q H Goodwill and other intangibles 4.33 0.66 M Q H Shareholders' equity changes 4.33 0.71 M Q H Appropriation of reatined earnings 4.43 0.63 M Q H Cash flow statement 4.73 0.45 M Q H Funds from operations 4.20 0.66 M Q H Dividends per share 4.70 0.47 M Q H Earnings per share 4.70 0.47 M Q H Number of shares outstanding 3.97 0.72 M Q H Shares issued at par value 4.00 0.74 M Q H Total dividends 4.27 0.69 M Q H Bonus / right issues 3.97 0.81 M NQ H Stock price 4.23 0.82 M Q H Stock exchange listings 3.93 0.78 M NQ H Volume of shares traded 3.73 0.69 M Q H Diluted earnings per share 4.10 0.61 M Q H Quartely / interim dividends 4.03 0.56 M Q H EPS for multiple classes of shares 4.03 0.56 M Q H M: Mandatory Information; V: Voluntary Information; Q: Quantitative Information; NQ: Non- Quantitative Information; H: Historical Information; F: Forward-Looking Information Table 1 – Part I 7

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