This is the first empirical study that uses publicly available data to provide direct evidence about the role of the qualitative characteristics (QCs) of financial information in managements' accounting decisions. Based on 40,895 hand-collected IFRS policy choices on 16 topics made by 514 large firms of 10 jurisdictions in the period 2005-2011, we identify 204 reasons for policy changes. The majority of these refer to QCs from the conceptual framework of the standard-setter, in particular to relevance, faithful representation, comparability and understandability. Firms also frequently refer to transparency, which is not directly mentioned in the framework. Furthermore, we analyse the circumstances under which firms explain their policy changes in terms of improved quality. We hypothesise and find that QCs are more often referred to if the change relates to measurement (i.e. to a more important accounting policy decision). We also find that references to QCs are positively associated both with firm size and with a measure of a jurisdiction's transparency. This complements previous research by providing evidence that managers are, at the least, alert to QCs. JEL Classifications: M41

This paper assesses the influence of an adoption of IAS/IFRS or US GAAP on the financial analysts’ forecast accuracy in a homogenous institutional framework. Our findings suggest that the forecast accuracy is higher for estimates based on IFRS or US GAAP data than for forecasts based on German GAAP data. Moreover, in the year of switching from German GAAP to US GAAP the forecast accuracy is lower than in other years. The paper contributes to prior research by providing evidence about the usefulness of international accounting data and about the adoption effects of a change to such accounting principles.

This paper proposes a framework for understanding management's decision-making on observable accounting policy choices. The framework is used to hypothesize how country, industry, and topic factors influence policy choice under International Financial Reporting Standards (IFRS). The hypotheses are tested on the choices made by the largest firms from 10 jurisdictions on a comprehensive set of IFRS policy topics, which are hand-collected from the financial statements. The results are consistent with the framework: country factors are particularly influential when the choice does not affect an important accounting number; and industry and topic factors influence the choice on some topics. Overall, we find that country factors have the greatest influence on IFRS policy choice.We continually review the content and presentation of our financial statements to ensure compliance with relevant accounting standards and regulations and also to consider their relevance and usefulness to readers. As a result of this ongoing review we have changed the format of our consolidated income statement from the nature of expense to the function format [. . .] We believe this revised presentation will provide users of our financial statements with a better understanding of our business.(Imperial Tobacco, Annual Report and Accounts 2007, p. 71)This quotation concerns accounting policy choice regarding the format of the income statement, which is one of several topics on which choice is available under International Financial Reporting Standards (IFRS). It illustrates how policy choice can be considered of practical importance by management on the grounds that it affects the relevance and usefulness of accounting information. As explained below, the literature shows that country, industry, and firm characteristics influence accounting policy choice. In their review of the research on accounting choice, Fields et al. (2001) concluded that a comprehensive theory did not exist. We aim Christian Stadler (International differences in accounting rules might be the main explanation for the country effect for the goodwill topic, and an important explanation for the LIFO topic.2 By 'free rein' we mean that a policy choice is specifically allowed by IFRS. There are some constraints in IAS 8 on changing the choice from one period to the next. A BAC U S

Purpose The purpose of this paper is to examine translation in the context of International Financial Reporting Standards (IFRS) by taking the example of the English term “impairment” in IAS 36, and following it into 19 translations. The paper then examines the terms used for impairment in English translations of annual reports provided by firms. Consideration is given to the best approach for translating regulations and whether that is also suitable for the translation of annual reports. Design/methodology/approach The two empirical parts of the paper involve: first, identifying the terms for impairment used in 19 official translations of IAS 36, and second, examining English-language translations of reports provided by 393 listed firms from 11 major countries. Findings Nearly all the terms used for “impairment” in translations of IAS 36 do not convey the message of damage to assets. In annual reports translated into English, many terms are misleading in that they do not mention impairment, peaking at 39 per cent in German and Italian reports in one year. Research limitations/implications Researchers should note that the information related to impairment in international databases is likely to contain errors, and the authors recommend that data should be hand-collected and then carefully checked by experts. The authors make suggestions for further research. Practical implications Translators of regulations should aim to convey the messages of the source documents, but translators of annual reports should not look only at the reports but also consult the terminology in the original regulations. The authors also suggest implications for regulators and analysts. Originality/value The paper innovates by separately considering regulations and annual reports. The authors examine a key accounting term systematically into a wide range of official translations. The core section of the paper is a new field of research: an empirical study of the translations of firms’ financial statements.

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