Financial statement users’ institutional logic
•Financial statement users’ institutional logic refers to their fundamental expressed views about accounting information.•The following dimensions of users’ institutional logic occupy a medium or large amount of space in users’ comments and are referred to in strong terms: Due process issues, readin...
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| Published in: | Journal of accounting and public policy 2021-03, Vol.40 (2), p.106819, Article 106819 |
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| Main Authors: | , |
| Format: | Article |
| Language: | eng |
| Subjects: | |
| Online Access: | Get full text |
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| Summary: | •Financial statement users’ institutional logic refers to their fundamental expressed views about accounting information.•The following dimensions of users’ institutional logic occupy a medium or large amount of space in users’ comments and are referred to in strong terms: Due process issues, readiness and relevance for use, comparability and consistency, and cost-benefit issues.•The two following dimensions are also widely discussed, but addressed in weaker terms: Economics and substance and measurement.•The following dimensions complete the ten dimensions of users’ institutional logic: Conceptual foundations, clarity, presentation and disclosure and financial statement manipulation.
In this paper, we investigate what we call “financial statement users’ institutional logic,” defined as users’ expressed fundamental views and beliefs about accounting information. We analyze users’ comment letters to standard setters in response to the proposed standards on lease accounting to identify the dimensions of the institutional logic that underlie their views on accounting information. Our qualitative analysis identified and validated ten principal dimensions, namely economics and substance, due process issues, measurement, readiness and relevance for use, conceptual foundations, clarity, presentation and disclosure, cost-benefit issues, comparability and consistency, and financial statement manipulation. Quantitative analyses revealed that four of these dimensions, i.e. due process issues, readiness and relevance for use, comparability and consistency, and cost-benefit issues, occupy a medium or large amount of space in users’ comments and are referred to in strong terms, while economics and substance and measurement, although also widely discussed, are addressed in weaker terms. Overall, our study begins to fill a gap in the literature by providing insights into users’ views on accounting information. These insights challenge the “homo economicus user” currently constructed in standard-setting debates. |
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| ISSN: | 0278-4254 1873-2070 |