Forecasting confidence under segment reporting

Birt, Jacqueline and Shailer, Greg (2011) Forecasting confidence under segment reporting. Accounting Research Journal, 24 3: 245-267. doi:10.1108/10309611111186993

Author Birt, Jacqueline
Shailer, Greg
Title Forecasting confidence under segment reporting
Journal name Accounting Research Journal   Check publisher's open access policy
ISSN 1030-9616
Publication date 2011-01-01
Year available 2011
Sub-type Article (original research)
DOI 10.1108/10309611111186993
Volume 24
Issue 3
Start page 245
End page 267
Total pages 23
Place of publication Bingley, W Yorks, United Kingdom
Publisher Emerald Group Publishing Ltd.
Language eng
Subject 1402 Applied Economics
2003 Language Studies
Abstract Purpose: Changes in Australian segment reporting standards over the last decade changed the required disaggregation of segment information. The purpose of this paper is to investigate whether increased disaggregation has implications for users' confidence in decisions based on segment reports and perceptions of segment reporting usefulness. Design/methodology/approach: Using an experiment based on the differences between the original AASB 1005 and the more detailed requirements of AASB 114, the authors test whether segment report users' confidence in forecasting and their perceptions of segment report usefulness differ between the different information sets provided under these standards. Findings: It was found that the more disaggregated or finer reports based on AASB 114 provide significantly more confidence to users, compared to the coarser segment reports based on the original AASB 1005, but this is not associated with differences in segment report usefulness scores. Research limitations/implications: The authors' experiment is based on AASB 1005 and AASB 114 and the results cannot be generalized to differences with other reporting standards. Examination of differences in recently released AASB 8 may reveal different implications for users' confidence and perceptions of usefulness. More generally, other tests of usefulness are needed to confirm whether opinions of usefulness that are not confirmed by decision-making practices provide a reliable basis for determining usefulness. Practical implications: By confirming that decision makers' confidence can be increased by the provision of finer information sets, the authors' results have practical implications for accounting standard setting. Originality/value: By testing the impact of report differences on user decision confidence, the paper addresses a previously overlooked issue.
Keyword Accounting standards
Fineness theorem
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collection: UQ Business School Publications
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Created: Fri, 04 Apr 2014, 01:11:24 EST by Karen Morgan on behalf of UQ Business School