Journal article

Is Financial Reporting Still Useful? Australian Evidence

Michael Davern, Nikole Gyles, Dean Hanlon, Matthew Pinnuck

Abacus: a journal of accounting, finance and business studies | Wiley | Published : 2019


There has been recent and growing criticism of the usefulness of financial reporting for investors, particularly the annual financial statements. In response, the IASB is pursuing several projects aimed at improving the relevance of financial information. To inform the IASB’s work, we investigate, using a mixed‐method approach, the extent and nature of the use of annual financial statements by equity investors. We examine the relevance of financial reporting for equity valuation in Australia across time. We find that financial reporting (specifically, reported net income, shareholders’ equity, and operating cash flows) remains relevant for investment decisions. We further support this findin..

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Funding Acknowledgements

The authors gratefully acknowledge funding provided by CPA Australia. The authors would like to thank the interview participants.