Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers

Accounting in Europe 11 (2): 185-209, December 2014

42 Pages Posted: 3 Feb 2014 Last revised: 9 Jan 2015

See all articles by Stefano Cascino

Stefano Cascino

London School of Economics

Mark Clatworthy

University of Bristol, Department of Accounting and Finance

Beatriz Garcia Osma

Universidad Carlos III de Madrid - Department of Business Administration

Joachim Gassen

Humboldt University of Berlin - School of Business and Economics; Humboldt University of Berlin - Center for Applied Statistics and Economics (CASE)

Shahed Imam

University of Warwick - Warwick Business School

Thomas Jeanjean

ESSEC Business School - Department of Accounting and Management Control

Date Written: July 8, 2014

Abstract

We review the academic literature on the use of financial reporting information by capital providers. We classify our findings by investor type and by information objective. While most capital providers use accounting information, our survey indicates that they do so in a variety of ways with financial reporting information competing with other sources of information. We also find that information intermediaries are influential in both credit and equity markets, making the identification of a typical target ‘user’ inherently difficult. Our main findings question the underlying objective of the Conceptual Framework to guide the development of standards for general-purpose financial statements to provide a typical knowledgeable investor with a true and fair view about the reporting entity. Finally, we identify gaps in the literature and suggest areas where future research can help inform important academic and policy debates.

Keywords: Capital providers; Conceptual framework; Financial reporting information

JEL Classification: G18, G38, M41

Suggested Citation

Cascino, Stefano and Clatworthy, Mark A. and Garcia Osma, Beatriz and Gassen, Joachim and Imam, Shahed and Jeanjean, Thomas, Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers (July 8, 2014). Accounting in Europe 11 (2): 185-209, December 2014. Available at SSRN: https://ssrn.com/abstract=2389752 or http://dx.doi.org/10.2139/ssrn.2389752

Stefano Cascino

London School of Economics ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
+44 (0)20 7955 6457 (Phone)
+44 (0)20 7955 7420 (Fax)

HOME PAGE: http://www.lse.ac.uk/accounting/people/stefano-cascino

Mark A. Clatworthy (Contact Author)

University of Bristol, Department of Accounting and Finance ( email )

School of Economics, Finance and Management
8 Woodland Road
Bristol, BS8 1TN
United Kingdom
+44(0)1173310914 (Phone)

Beatriz Garcia Osma

Universidad Carlos III de Madrid - Department of Business Administration ( email )

Calle Madrid 126
Getafe, Madrid, Madrid 28903
Spain

Joachim Gassen

Humboldt University of Berlin - School of Business and Economics ( email )

Spandauer Str. 1
Berlin, D-10099
Germany
+49 30 2093 5764 (Phone)
+49 30 2093 5670 (Fax)

Humboldt University of Berlin - Center for Applied Statistics and Economics (CASE) ( email )

Spandauer Strasse 1
Berlin, D-10178
Germany

Shahed Imam

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Thomas Jeanjean

ESSEC Business School - Department of Accounting and Management Control ( email )

Av Bernard Hirsch
Cergy-Pontoise 95021
France

Register to save articles to
your library

Register

Paper statistics

Downloads
2,163
Abstract Views
5,578
rank
6,297
PlumX Metrics