business with confidence icaew.com brian singleton-green financial reporting workshop, rome: 13-14...

BUSINESS WITH CONFIDENCE icaew.com

Brian Singleton-Green

Financial Reporting Workshop, Rome: 13-14 June 2013

Financial reporting research – is it relevant to practice?


© ICAEW 2013

Is FR research relevant to practice?

Obvious answers

Obstacles

The IASB’s new approach

Four styles of standard setting

The IASB, research and the future


© ICAEW 2013

Is it relevant to practice? Obvious answers

No


© ICAEW 2013

AAA membership

Year Practitioners Academics

1970 8,500 4,000

1979 5,500 5,500

2009 600 6,000


© ICAEW 2013


No

Yes


© ICAEW 2013

Practitioner concerns

What should I do? (practice)

What should we be required to do?

(policy)


© ICAEW 2013

Corporate reporting questions

• Who uses corporate reporting?

• What use do they make of it?

• What other information do they use?

• What are the effects of corporate reporting (effects ≠ uses)?

• Eg, effects of different disclosures?

• Effects of different forms of measurement?

Answers will depend on context


© ICAEW 2013

The corporate reporting debate

The standard setting debate


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No

Yes

Depends


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Obstacles

• Incomprehensible

• Disagreements

• Normative conclusions

• Perceived irrelevance


© ICAEW 2013

AAA membership: what happened?

• Research changed

• Practice changed


© ICAEW 2013

The IASB’s new approach

Feedback Statement: Agenda Consultation 2011 (December 2012)


© ICAEW 2013

… the IASB should establish, or facilitate

the establishment of, a dedicated research

capability to provide leadership in the

thinking about financial reporting


© ICAEW 2013

“Priority research projects”

• Emissions Trading Schemes

• Business Combinations under Common Control

• Discount Rates

• Equity Method of Accounting

• Intangible Assets; Extractive Activities; and Research & Development Activities

• Financial Instruments with the Characteristics of Equity

• Foreign Currency Translation

• Non-financial Liabilities (amendments to IAS 37)

• Financial Reporting in High Inflationary Economies


© ICAEW 2013

Four styles of standard setting

Codifying best practice

Implementing a theory

Doing what works

Doing what people want

Finding out what current practices are

-

Finding out what works

-


© ICAEW 2013

The IASB, research and the future


© ICAEW 2013

IASB: motivations for change

• The financial crisis

• Unsuccessful projects

• The end of convergence

Credibility


© ICAEW 2013

The IASB and research: the future

• More use of academic research

• Will have to be positive results

• Research is not a panacea

• Change is reversible


© ICAEW 2013

ICAEW lectures and conferences

• “International Financial Reporting Standards (IFRS): pros and cons”, Ray Ball, Accounting and Business Research (2006)

• Over 18,000 downloads from SSRN


© ICAEW 2013

Information for Better Markets Conferences

• London, 16-17 December 2013

• Reporting Financial Performance

• Alfred Wagenhofer (Graz)

• Charles Lee (Stanford)

• Robert Libby (Cornell)

• Steven Young (Lancaster)


© ICAEW 2013

The long term

• Engage with the IASB

• Engage with practitioners

• Create forums for interaction

• Communication: clear, short and simple

• Explain policy-relevance

Impact

A world leader of the accountancy and finance profession


business with confidence icaew.com brian singleton-green financial reporting workshop, rome: 13-14...

Documents

business research

conferences slide

financial reporting

future slide

interaction slide

policy slide

reversible slide

ssrn slide