Non-IFRS earnings information in financial highlights of annual reports – evidence from Australia
Type
conference paper
Author(s)
Abstract (De)
The highlights section in the annual report provides an opportunity for firms to emphasize specific performance measures and sets the tone for the rest of the annual report. Based on a sample of the top 200 Australian firms, we find that companies rely on non-IFRS earnings to supplement statutory net income in the highlights section. At the same time, firms are more likely to present non-IFRS earnings in the highlights section that beat earnings benchmarks, suggesting that they might be motivated to embellish their financial performance through non-IFRS earnings. However, we further find the non-IFRS earnings used in the highlights section are more likely to be included in audited sections of the annual report as well, serving as a tool for signaling credibility. Our findings add to the ongoing controversial debate on the informativeness of non-IFRS earnings with a specific focus on the highlights section in the annual report.
Language
English
HSG Classification
None
HSG Profile Area
None
Event Title
JIAR conference
Event Location
Online
Event Date
23.06.2021
Subject(s)
Eprints ID
265186