Are Users of Financial Statements of Publicly and Non-Publicly Traded Companies Different or Not? An Empirical Study

Abstract

In more than 100 countries worldwide, publicly traded, or listed companies must prepare their consolidated accounts using International Financial Reporting Standards (IFRS). For non-publicly traded, or non-listed companies, the situation is less harmonized. The European Union (EU), for example, does not require IFRS for non-listed companies. One of the arguments in favour of this distinct approach is that financial statements of listed and non-listed companies attract different end users. Empirical evidence to back up this assumption is, however, rare. This paper contributes by empirically exploring who the users of the different financial statements are. Our survey of 849 individuals who use financial statements reveals that not only investors and analysts, but also suppliers, competitors, customers and consultants are important user groups. We find some differences between users who consult financial statements of listed or non-listed companies, but we also find some interesting similarities. Almost half of the survey respondents are interested in both listed and non-listed companies and there are only limited differences in the desired information concerning both types of companies. Finally, our analysis shows that an average respondent spends less than 15 minutes per financial statement, does not look at the notes and is only interested in companies located in his own country.

Keywords: IFRS, SME's, users of financial statements

JEL Classification: M41, M43, M44