Publication Type
Journal Article
Version
acceptedVersion
Publication Date
9-2021
Abstract
We survey stakeholders in the financial reporting process to examine trust in fair value accounting. Although respondents demonstrate high confidence in financial statements, they believe that fair value accounting decreases trust in financial reporting and that preparing fair value numbers is costly but beneficial. They also strongly believe in the Conceptual Framework underlying standard setting. Using multivariate regression analyses, we find that perceiving fair value accounting as beneficial is positively associated with trust in it, consistent with the theory of reasoned action that people engage in behavior (e.g., trust) based on expected positive outcomes of that behavior. We find that this positive association increases with stronger beliefs in the Conceptual Framework. Our paper contributes to the fair value literature by providing general insights on trust in fair value accounting and a specific and novel assessment of how the perceived benefits of fair value accounting increase stakeholders' trust in it.
Keywords
trust, fair value accounting, Conceptual Framework
Discipline
Accounting | Corporate Finance
Research Areas
Corporate Reporting and Disclosure
Publication
Journal of International Accounting Research
Volume
20
Issue
3
First Page
21
Last Page
42
ISSN
1542-6297
Identifier
10.2308/JIAR-2021-034
Publisher
American Accounting Association
Citation
GOH, Clarence; Lim, Chu Yeong; Ng, Jeffery; PAN, Gary; and Ow Yong, Kevin.
Trust in Fair Value Accounting: Evidence from the Field. (2021). Journal of International Accounting Research. 20, (3), 21-42.
Available at: https://ink.library.smu.edu.sg/soa_research/1926
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.2308/JIAR-2021-034