Aim of the assignment
The IASB is a private standard-setter, operating in London, by setting standards that have been adopted across the world. While the IASB has no control over whether these standards are adopted, they do have considerable impact and influence on global accounting practices. The IFRS conceptual framework developed by the IASB evaluates the usefulness of information to users by applying qualitative factors, such as relevance and fair representation.
According to this 2018 IFRS Conceptual Framework for Financial Reporting,
“The objective of general-purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions relating to providing resources to the entity”
“The primary users need information about the resources of the entity not only to assess an entity’s prospects for future net cash inflows but also to evaluate how effectively and efficiently management have stewarded the entity’s existing resources.”
The primary users need information about the resources of the entity not only to assess an entity’s prospects for future net cash inflows but also how effectively and efficiently management has discharged their responsibilities to use the entity’s existing resources (i.e., stewardship). [1.3-1.4]
Some literature supports the position that financial information is useful to investors, lenders and other creditors in making decisions relating to providing resources to the entity. However, there is a considerable body of academic literature debating the relevance and faithful representation of the elements contained in the financial statements and the ability of primary users to evaluate the stewardship of resources by management.
Critically evaluate papers that are in support of the decision usefulness (to primary users) of the information contained in Financial Reports (prepared in accordance with International Financial Reporting Standards (IFRS). Compare and contrast these with papers discussing the limitations of usefulness of financial information, especially in relation to the relevance, fair representation of assets/liabilities and the ability of users to evaluate stewardship
You should identify and critically evaluate in your essay the key arguments made by authoritative authors to assess their relative strengths, weaknesses and relevance in the context of the assignment question. Provide a conclusion offering an informed opinion.
We recommend that you use the articles listed below and select further high quality sources from your research. This will involve evaluating a wide range of sources to select those which you judge to be most appropriate. You should limit your final selection to a maximum of 20 articles in total (including articles from the recommended reading list).
Learning Outcomes
This is designed to meet the following learning outcomes:
- Critically review various accounting techniques and concepts, introduced in prerequisite modules, through self-directed research.
- Evaluate the implications of accounting practice, recognising its limitations, in a broader social and economic context.
6. Express complex arguments logically, using supporting analysis and
evaluation with reference to current developments in accounting.
Title of the assignment
Is financial reporting information most relevant to users and faithfully represent the stewardship and future cashflows of an entity?
Required:
In addressing this question, you should consider the following sub-questions:
- Is the information provided in the financial statements most relevant to primary users?
- Does Financial reporting information (under global IFRS) best meet the objective of enabling users to evaluate the stewardship of management?
- Does fair value measurement of elements under IFRS faithfully represent the financial information and is it most relevant to users?
- Has the adoption of International Accounting Standards (IAS) globally had an effect on stewardship in companies?
Submission and deadlines
Your assignment should be a maximum of 4,000 words long. This word count limit includes the body of your essay and in text citations but excludes your title page, contents page and list of references. Use the format specified in the module guide.
This assignment carries 40% of the available marks for this module. The sample feedback sheet shows the marking criteria which are described in further detail in the module guide.
Your assignment should comprise one Word document with a filename in the format 12345678-synoptic2 (where 12345678 is your student number).
You must upload your assignment document to the turnitin drop box on the module’s moodle site before the deadline.
Your assignment will be marked anonymously.
Do not include your name in the filename or anywhere in the document.
When you submit an assignment using turnitin you are confirming that the work is your own. You are not required to hand in a hard copy of your assignment.
Recommended Reading List
The following may be used as a starting point for your literature search:
Aust, V., Pelger, C. and Drefahl, C. (2021) ‘Exploring the relationship between valuation and stewardship uses of accounting information: Empirical evidence from German listed firms’, Journal of International Accounting, Auditing & Taxation, 42, pp. N.PAG. doi:10.1016/j.intaccaudtax.2020.100375.
Bandara, S. and Falta, M. (2021) ‘The usefulness of IFRS-compliant reports: perceptions of Sri Lankan investors and lenders’, Asian Review of Accounting, Vol. 29 No. 4, pp. 525-557. https://doi-org.oxfordbrookes.idm.oclc.org/10.1108/ARA-03-2021-0058
Evans, G., Lusher, J. and Day, S. (2022) ‘Completeness of the Qualitative Characteristics Using Foucauldian Critical Discourse Analysis and Content Analysis Paradigms: Towards a Revised Conceptual Framework,’ Journal of Financial Reporting and Accounting, 20(2), pp. 334–351. doi: 10.1108/JFRA-11-2020-0313.
Hutchings, G. and Deegan, C. (2022) ‘The Development and Application of a Decision-Useful Measure of Environmental Best Practice for the Mining Industry’ Accounting, Auditing & Accountability Journal, 35(4), pp. 1154–1181. doi: 10.1108/AAAJ-11-2020-5014.
Lau, C.K. (2021) ‘Measurement uncertainty and management bias in accounting estimates: the perspective of key audit matters reported by Chinese firms’ auditors’, Asian Review of Accounting, Vol. 29 No. 1, pp. 79-95. https://doi-org.oxfordbrookes.idm.oclc.org/10.1108/ARA-07-2020-0109
Kuhner, C. and Pelger, C. (2015) ‘On the Relationship of Stewardship and Valuation—an Analytical Viewpoint’ Abacus, 51(3), pp. 379–411. doi: 10.1111/abac.12053.
Palea, V. (2014) ‘Fair value accounting and its usefulness to financial statement users’, Journal of Financial Reporting and Accounting, Vol. 12 No. 2, pp. 102-116. https://doi-org.oxfordbrookes.idm.oclc.org/10.1108/JFRA-04-2013-0021
Pandya, A., van Zijl, W. and Maroun, W. (2021) ‘Fair value accounting implementation challenges in South Africa’, Journal of Accounting in Emerging Economies, Vol. 11 No. 2, pp. 216-246. https://doi-org.oxfordbrookes.idm.oclc.org/10.1108/JAEE-01-2020-0013
| Assessment Criteria | Refer 0-29% | Marginal Refer 30-39% | Threshold Pass 40-49% | Good 50-59% | Very Good 60-69% | Excellent 70-85% | Outstanding 85-100% |
| Use of literature 25% | Poor selection and use of literature | Some evidence of selection and use of literature that is relevant to the topic | Selection and use of appropriate literature, including some recommended literature | Selection and use of a relevant range of sources, including some high quality academic sources and recommended reading | Selection and use of a good range of sources including mainly relevant, high quality academic sources and recommended reading | Selection of relevant, high quality academic sources. Very good use of these sources, including the recommended reading | Selection of relevant, high quality academic sources. Comprehensive and detailed use of the sources, including the recommended reading. |
| Critical approach to theory 25% | Little criticality of sources | Mainly descriptive presentation of issues | Some appreciation of difference sources, methods, authors and/or arguments. A mix of descriptive and analytical writing | Some evidence of criticality, such as assessing the quality of different sources, methods, theories and authors. An analytical rather than a descriptive approach | Critical evaluation of literature, assessing the quality of different sources, methods, theories and authors. Evidence of forming a synthesis of ideas | Critical evaluation of literature, assessing the quality of different sources, methods, theories and authors. A clear synthesis of ideas | Critical evaluation of literature, assessing the quality of different sources, methods, theories and authors. Evidence of forming independent ideas and creating an original synthesis of ideas |
| Problem solving, application of theory to practice 25% | Little discussion related to the topic with lack of clarity in the introduction and conclusion | Some relevant discussion related to the topic with an introduction and conclusion | Coherent and relevant discussion related to the topic with a clear introduction and conclusion | Specific and appropriate evaluation, reflecting some of the key issues, supported by evidence. Clear introduction and conclusion. | Analysis of the relevant issues, some use of evidence, clarity of argument and reasoning with appropriate evaluation. Clear introduction and relevant conclusions drawn | Very good analysis of the key issues, detailed use of evidence, clarity of argument and reasoning with appropriate evaluation. Clear introduction and relevant conclusions drawn | Discerning, specific analysis of the key issues, detailed use of evidence, clarity of argument and reasoning with appropriate evaluation. Clear introduction and conclusions drawn from arguments presented |
| Presentation 12.5% | Lacking clear structure. Lack of clarity in language. | Some structure. Lack of clarity in language. | Clear structure. Fluency, grammar, spellings, not always accurate but clarity of meaning. | Clear and appropriate structure. Fluency, grammar, spellings, not always accurate but clarity of meaning. | Clear and appropriate structure. Fluent, accurate academic style. Well written with clarity and fluency. | Clear and appropriate structure Fluent, accurate academic style. Well written with clarity and fluency. | Polished imaginative approach. Clear and appropriate structure Fluent, accurate academic style. |
| Referencing 12.5% | Incorrect referencing | Incorrect referencing | Couple of major and repeated minor referencing errors | One major and few minor referencing errors | One major and couple of minor referencing errors | One minor referencing error | Correct referencing |
