Title

The Relationship Between Competition and Business Segment Reporting Decisions Under the Management Approach of IAS 14 Revised

Document Type

Article

Publication Date

2007

Publication Source

Journal of International Accounting, Auditing and Taxation

Abstract

This research addresses the relationship between industry competition and managers’ choice regarding whether to separately disclose a business segment following the adoption of International Accounting Standard 14 Revised (IAS 14R) and the management approach to segment determination. Logistic regression reveals a significant negative relationship between disclosure and company returns in excess of the industry average.

Prior research indicated a significant relationship between disclosure and abnormal returns under the industry approach to segmentation. Our results provide evidence that this flexibility persists as managers maintain their ability to aggregate segments to protect excess returns under IAS 14R and the management approach. Our findings are timely as the IASB plans to modify its segment reporting requirements as part of the Board's convergence agenda and as thousands of companies worldwide, effective from 2005 onward, are now preparing financial statements using IFRS.

Inclusive pages

51-68

ISBN/ISSN

1061-9518

Comments

Copyright © 2007, Elsevier, from Journal of International Accounting, Auditing and Taxation.

Publisher

Elsevier

Volume

16

Issue

1

Peer Reviewed

yes