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BUSINESS WITH CONFIDENCE icaew.com Brian Singleton-Green Financial Reporting Workshop, Rome: 13-14 June 2013 Financial reporting research – is it relevant.

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Presentation on theme: "BUSINESS WITH CONFIDENCE icaew.com Brian Singleton-Green Financial Reporting Workshop, Rome: 13-14 June 2013 Financial reporting research – is it relevant."— Presentation transcript:

1 BUSINESS WITH CONFIDENCE icaew.com Brian Singleton-Green Financial Reporting Workshop, Rome: June 2013 Financial reporting research – is it relevant to practice?

2 BUSINESS WITH CONFIDENCE icaew.com © 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

3 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 Is it relevant to practice? Obvious answers No

4 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 AAA membership YearPractitionersAcademics 19708,5004, , ,000

5 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 Is it relevant to practice? Obvious answers No Yes

6 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 Practitioner concerns What should I do? (practice) What should we be required to do? (policy)

7 BUSINESS WITH CONFIDENCE icaew.com © 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

8 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 The corporate reporting debate The standard setting debate

9 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 Is it relevant to practice? Obvious answers No Yes Depends

10 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 Obstacles Incomprehensible Disagreements Normative conclusions Perceived irrelevance

11 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 AAA membership: what happened? Research changed Practice changed

12 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 The IASB’s new approach Feedback Statement: Agenda Consultation 2011 (December 2012)

13 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 … the IASB should establish, or facilitate the establishment of, a dedicated research capability to provide leadership in the thinking about financial reporting

14 BUSINESS WITH CONFIDENCE icaew.com © 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

15 BUSINESS WITH CONFIDENCE icaew.com © 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 -

16 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 The IASB, research and the future

17 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 IASB: motivations for change The financial crisis Unsuccessful projects The end of convergence Credibility

18 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 What the IASB means by “research” Academic research Staff research Work

19 BUSINESS WITH CONFIDENCE icaew.com © 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

20 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 The long term Engage with the IASB Engage with practitioners Create forums for interaction

21 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 Information for Better Markets Academic events ICAEW lectures and conferences

22 BUSINESS WITH CONFIDENCE icaew.com © 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

23 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 Information for Better Markets Conferences London, December 2013 Reporting Financial Performance Alfred Wagenhofer (Graz) Charles Lee (Stanford) Robert Libby (Cornell) Steven Young (Lancaster)

24 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013 Information for Better Markets Academic events ICAEW lectures and conferences Reports

25 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013

26 BUSINESS WITH CONFIDENCE icaew.com © ICAEW 2013

27 BUSINESS WITH CONFIDENCE icaew.com © 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

28 A world leader of the accountancy and finance profession BUSINESS WITH CONFIDENCE icaew.com


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