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
Date Written: July 8, 2014
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: Suggested Citation