ICAEW Financial Reporting Faculty publishes report on the principal factors affecting financial reporting outcomes

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07 Jul, 2016

The Financial Reporting Faculty of the Institute of Chartered Accountants in England and Wales (ICAEW) has published a Public Policy Paper on ‘Incentives and institutions in accounting: thinking beyond standards’, as part of its Information for Better Markets thought leadership initiative.

The report examines the principal factors that affect financial reporting outcomes at the level of the individual enterprise, above and beyond the requirements of financial reporting standards. It identifies two commonly recognised types of factor that affect financial outcomes at such a level; the incentives of those involved in the accounting process, especially the managers responsible for the accounts preparation, and the impact of surrounding institutions, which both help shape incentives, and facilitate and constrain managers’ actions.

The report then goes on to:

  • consider some of the institutional changes involved in globalisation and how they affect accounting; and
  • report some key findings of research on how variances in incentives and institutions affect financial reporting outcomes and discuss the challenges posed by these findings.

An executive summary and the full research paper are available from the ICAEW website.

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