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- Brearey, Chester H. (x)
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Show moreExisting literature on financial reporting practices within the first wave of regulation- the Interstate Commerce Commission may have its historical roots in the work of Charles Francis Adams Jr., and his fellow Commissioners contained within the financial reporting requirements established through state regulation in the Annual Reports of the Board of Railroad Commissioners in The Commonwealth of Massachusetts 1870 - 1913. In addition, the regulatory environment and the scope of railway activities found within the afore-mentioned reports may throw light on the question of what forces converted the simply recording technology of the Italian merchants of the fourteenth and fifteenth centuries into the highly-developed sophisticated field of accounting of the twentieth century. The approach of this initial study is narrative as it is to systematically explore and analyze the content within the Annual Reports of the Massachusetts Railway Commission from 1870 to 1913; these reports may represent a major historical root of today’s practice of corporate financial reporting. In accounting, as in other fields, knowledge of the past provides a prologue to understanding contemporary matters.
Doctorate of Management Programs
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Show more“Accounting may provide security, the reporting provides the information” - Anonymous. Calls for the reformation of financial reporting have exacerbated in recent years in light of a rapidly changing global investment climate and in the wake of financial crises such as Enron. This study explores the existing model of financial reporting, and the characteristics that are identified with investor confidence, and whether they meet their primary objective: providing information that helps users to make resource allocation decisions. The study examines current literature and conducts interviews to determine the types of information that users find relevant. The evidence suggest that the current financial reporting system is overly complex; that there is lack of disclosure of forward-oriented types of information which are comparable over time (e.g. value drivers, critical success factors as well as non-financial information), and, despite an increasing use of fair values as a measurement objective in some assets and liabilities, many investors propose using fair-values more pervasively for reasons of importance and relevance.
Doctorate of Management Programs
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Show more“Arguably, accounting is as much about communication as it is to do with measurement. No matter how effective the process of accounting quantification, its resultant data will be less than useful unless they are communicated adequately” (Raymond John Chambers). Calls for the reformation of financial reporting have exacerbated in recent years in light of a rapidly changing global investment climate and in the wake of a battered financial system. This study explored the interrelationships between informational complexity, transparency and stewardship on the usefulness of financial reporting. Empirical analyses was based on a survey of more than 650 executives to test hypotheses that informational complexity impairs judgment through decision-makers’ strategy selection; that transparency captures the timeliness, interpretation, and dissemination of financial reporting that leads to a more informed market; and that there is a stewardship demand to report on the control and use of resources by those accountable for their control and use. The most interesting finding of this study was the lack of support for the connection between complexity, transparency and value relevance, even though prior research has found strong support for a relationship between these three constructs. However, it is clear that although considerable complexity can originate from the intricacy of commercial transactions and events themselves. The accounting for such transactions, by their very nature is complicated and is therefore beyond the control of standard setters. It is therefore imperative that we acknowledge and distinguish between two types of complexity in financial reporting, from the outset: that which is inescapable, due to the inherent complexity of certain transactions, and that which could be avoidable, having been brought about by accounting standards themselves. Additionally, the impact of regulatory trust on decision usefulness was found to be significant, but negative. Can it be postulated that rapid changes in the economy, inadequacy of accounting regulation and other institutions creates a negative effect on the usefulness of accounting information?
Doctorate of Management Programs
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