As part of a future international accounting standard, the USA Financial Accounting Standards Board and UK International Accounting Standards Board recently updated their description of the financial reporting information characteristics that determine its decision usefulness for end users. Yet the relationships inherent in the description have not been empirically validated. If invalid, the description may globally misguide future professional information efforts for a multitude of business users and decisions. A causal model is created of decision-useful financial reporting information characteristics from the description, then evaluated using partial least squares and survey data from business information users as defined by the international standard. The model significantly predicted user perceptions of key information constructs (Decision Usefulness [76%], Relevance [62%], and Faithful Representativeness [57%]; R2 values, p<0.01). However, theoretically and practically important constructs (Verifiability, Completeness, Faithful Representativeness) did not significantly contribute to the model.
Bovee, Matthew W.; Roberts, Tom L.; and Srivastava, Rajendra P., "Decisison Useful Financial Reporting Information Characteristics: An Empirical Validation of the Proposed FASB/IASB International Accounting Model" (2009). AMCIS 2009 Proceedings. 368.