Financial Reporting Practices and Investment Decisions: A Review of the Literature (2024)

SSRN Electronic Journal

The Effects of Financial Reporting and Disclosure on Corporate Investment: A Review

2019 •

Wm. Dennis Huber

The Effects of Financial Reporting and Disclosure on Corporate Investment: Analysis and Critique

2020 •

Wm. Dennis Huber

The purpose of this paper is to present an analysis and critique of Roychowdhury, Shroff, and Verdi’s The effects of financial reporting and disclosure on corporate investment: A review (Journal of Accounting & Economics, 68 (2019)). Roychowdhury, Shroff, and Verdi survey the empirical literature over the previous two decades on “whether and to what extent financial reporting facilitates the allocation of capital to the right investment projects,” “provide a framework to organize this literature,” and “highlight opportunities for future research.” The framework they provide for organizing the literature “articulate[s] two broad scenarios in which financial reporting ‘matters’ for investment choices: (i) the presence of information asymmetry that gives rise to agency frictions such as adverse selection and moral hazard costs, and (ii) the presence of uncertainty about growth opportunities.” The analysis and critique presented herein addresses the framework and the first scenario. In particular, it focuses on what they refer to as agency frictions and the opportunities they suggest for future research. While the question of whether and to what extent financial reporting facilitates the allocation of capital to the right investment projects is important and worthy of future research, the framework and first scenario present several problems that cannot easily be ignored if the opportunities for future research are to be pursued.

Licensed under Creative Common THE EFFECTS OF FINANCIAL REPORTING QUALITY ON INFORMATION ASYMMETRY AND ITS IMPACTS ON INVESTMENT EFFICIENCY

2016 •

Kania Nurcholisah

Financial reporting is the primary means of communicating financial information to external parties, which are used as a basis for decision making. Financial statement information will have a utility value if obtained from quality financial reporting. Understanding the quality of financial reporting can be viewed in two perspectives. The first view states that the quality of financial reporting related to the company's overall performance is illustrated in corporate profits. Associated with the quality of which measures are focused on attributes that are believed to affect FRQ such as earnings management, financial restatements, and timeliness. The second view states that the quality of financial reporting related to the performance of the company's shares in the capital market. Which is getting stronger relationship between income in exchange markets shows that financial reporting information is getting higher. With the quality of financial reporting it can protect investor...

Accounting

Measuring the effect of international financial reporting standards on quality of accounting performance and efficiency of investment decisions

Mahfod Aldoseri

The purpose of this study is to verify the impact of international financial reporting standards (IFRS) adoption on the quality of accounting performance and efficiency of investment decisions in the Saudi business environment as an emerging economy. In this study, content analysis approach is adopted for examining the annual reports of Saudi companies listed in Saudi stock exchange market during two periods: the pre-adoption of IFRS period during the year of 2016 and the post-adoption of IFRS period during the period 2017-2018. The study uses accounting information, accounting conservatism, earning management as alternative variables of accounting performance quality. In addition to accounting profit quality, liquidity and cost of capital are also used as alternative variables for the efficiency of investment decisions. The study finds that there was a positive impact of IFRS adoption on the quality of accounting performance, since it was positively related to both the qualitative ...

Journal of Accounting and Economics

The financial reporting environment: Review of the recent literature

2010 •

Thomas Lys

Journal of Accounting and Economics

How does financial reporting quality relate to investment efficiency?

2009 •

Tatiana Minniyakhmetova

International Journal of Nonlinear Analysis and Applications

Excellence of Financial Reporting Information and Investment Productivity

2021 •

Alim Al Ayub Ahmed

Objective –This study intends to examine the relationship between investment efficiency and financial information excellence. The study is also examining the moderating impact of sustainability on the relation between excellence in financial information and investment productivity. Methodology –The cumulative measurements are 668 firm-years and are made up of 257 subsamples of underinvestment and 411 sub-samples of overinvestment. This study may find no proof on the moderating effect of diversification on the relation between excellence in financial information and efficiency in investment. In the years 2016 to 2019, our samples are companies listed on the Dhaka Stock Exchange. Findings – The results indicate that financial information reporting quality (both for overinvestment and underinvestment sub-samples) has a positive association with investment performance. Although the evidence is not consistent across sub-samples, the test findings on the relationship between diversificati...

WAFFEN-UND KOSTUMKUNDE JOURNAL

Investment in context of Financial Reporting Quality: A SystematicReview

2020 •

D. Muhammad T U R K I Alshurideh

Various literature review were carry out in order to assess the relation between Financial Reporting Quality and Investment. Nevertheless the relation between them requires more investigation from different perspective in order to extend our knowledge theoretically on what's been done and where the researches reached. this study present a systematic review on the relation between financial reporting quality and investment aiming to provide a comprehensive review of all articles addressed this topic till 2019. the main finding resulted of 28 articles and a model was built from the relation of different types of variables followed from the studies in order to extend our models. the main problem was with the frequency resulted from analyzing targeted relation. Moreover. Most of the studies was collected based on secondary data from the stock market and analyzed mainly by using the regression models, in additional to few surveys and qusi-experiments questionnaire and one interview. further , most of the articles were undertaken in Indonesia and Iran , followed by China then USA respectively among different countries. alongside by most of the studies which was analyzed were conducted in the context of corporation which is publicity listed in the stock market. Followed by private firms .our finding of this systematic review will enlighten the research targeting the relation between financial reporting quality and investment and would be helpful to spotlight future research guide and open opportunities for cross-disciplinary research .

Quality of Financial Reporting, Investment and Quality of Disclosure: With Stressing on Type of FinancingQuality of Financial Reporting, Investment and Quality of Disclosure: With Stressing on Type of Financing

2020 •

Mehdi Zeynali

The Winners

Integrated Reporting and Investment: How are They Related?

Bernadeta Susilo Martanti

The research aimed to explore how integrated reporting potentially impact the investor decision within mandatory and voluntary regulation. The method used was exploration of arguments from several researchers, either from theoretical and empirical basis, or literature review. The method of this qualitative research was dividing the literature into categories which in this research would be mandatory and voluntary regulations. The sub categories were divided by two countries which were Africa and The United States as research objects. The result and discussion were integrated reporting increases the value relevance of information produced by the company and underline the way companies create a value over the short until long term by informing business model, corporate strategy, and forecasting view. The result shows that Integrated Reporting will be more useful if the Government mandates the regulation like in Africa. It is considered that when Integrated Reporting potentially impac...