Question

A summary of this research :

Information on this research

an empirical evaluation of accounting income numbers

Answer 1

ANSWER: summary Main research questions:Does the accounting net income number contain information?Is that information timely?Key findings:Accounting net income numbers do contain information regarding firm performance, but that information is not timely.Implications for accounting research:Accounting numbers are shown to have information content, and are not just the result of the application of a set of rules.This study opens the door for more research into the information content of accounting numbers and how well investors understand that information. Furthermore, future research will use more empirical analyses, and focus less on advancing one accounting system or rule over another.An empirical evaluation of accounting income numbers requires agree- ment as to what real-world outcome constitutes an appropriate test of use- fulness. Both the content and the timing of existing annual net income numbers will be evaluated since usefulness could be im- paired by deficiencies in either.Empirical definitions. The definition of empirical is something that is based solely on experiment or experience. An example of empirical is the findings of dna testing.Empirical research is a type of research methodology that makes use of verifiable evidence in order to arrive at research outcomes. In other words, this type of research relies solely on evidence obtained through observation or scientific data collection methods.The paper provides survey data on the information quality under IFRS, IFRS for SME and German-GAAP from the perspective of non-publicly traded mid-sized corporations. Survey findings suggest for a higher quality of financial statements under German-GAAP compared to those under IFRS. Beyond that, more corporations anticipate an increase in information quality with a shift from (full-)IFRS to IFRS for SME. The findings of empirical research previously obtained regarding publicly traded corporations, which show preferences for IFRS, cannot be confirmed in respect of the preferences of the non-publicly traded mid-sized corporations participating. This may be due to a general skepticism towards IFRS, a lack of IFRS knowledge, the convergence of German-GAAP and IFRS owing to the German Accounting Law Reform Act or in-group biases.