A two-stage model of decision-making over financial reporting regimes and techniques in the uk: theoretical analysis supported by illustrative case studies

Yu-Lin Hsu, Gavin Reid

Research output: Contribution to conferenceAbstract

Abstract

This paper develops a new two-stage decision model to explain the choices of financial reporting regimes (e.g. IFRS or UK GAAP) and techniques (e.g. valuing intangibles, by cost, income or market methods) for UK companies. The theoretical framework is based on the choice theory of orderings (Lex and CoLex), and is expressed in decision trees which capture firms’ actions, based on calibrated benefits and costs. The decision-making processes are examined through three UK empirical case studies (one private and two public firms), that expound their decision trees, and explain their decisions. We probe the rationale of their decisions using field-work investigation methods, through which we develop a ‘stated preference’ metric of choice, which allows us to interpret how decisions are made, and how they differ: over time (notably when regime changes are being implemented e.g. the emergence of New UK GAAP post-2015); and across firms (where factors like ease of execution and the quality and quantity of information needed for decisions, are shown to play a large part).

Conference

Conference41st Annual Congress of the European Accounting Association
CountryItaly
CityMilan
Period30/05/181/06/18

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Two-stage model
Theoretical analysis
Decision making
Financial reporting
Decision tree
International Financial Reporting Standards
Decision-making process
Public firm
Decision model
Regime change
Income
Factors
Intangibles
Costs
Stated preference
Choice theory
Rationale
Costs and benefits
Theoretical framework

Cite this

Hsu, Y-L., & Reid, G. (2018). A two-stage model of decision-making over financial reporting regimes and techniques in the uk: theoretical analysis supported by illustrative case studies. Abstract from 41st Annual Congress of the European Accounting Association, Milan, Italy.
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abstract = "This paper develops a new two-stage decision model to explain the choices of financial reporting regimes (e.g. IFRS or UK GAAP) and techniques (e.g. valuing intangibles, by cost, income or market methods) for UK companies. The theoretical framework is based on the choice theory of orderings (Lex and CoLex), and is expressed in decision trees which capture firms’ actions, based on calibrated benefits and costs. The decision-making processes are examined through three UK empirical case studies (one private and two public firms), that expound their decision trees, and explain their decisions. We probe the rationale of their decisions using field-work investigation methods, through which we develop a ‘stated preference’ metric of choice, which allows us to interpret how decisions are made, and how they differ: over time (notably when regime changes are being implemented e.g. the emergence of New UK GAAP post-2015); and across firms (where factors like ease of execution and the quality and quantity of information needed for decisions, are shown to play a large part).",
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note = "41st Annual Congress of the European Accounting Association ; Conference date: 30-05-2018 Through 01-06-2018",

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Hsu, Y-L & Reid, G 2018, 'A two-stage model of decision-making over financial reporting regimes and techniques in the uk: theoretical analysis supported by illustrative case studies' 41st Annual Congress of the European Accounting Association, Milan, Italy, 30/05/18 - 1/06/18, .

A two-stage model of decision-making over financial reporting regimes and techniques in the uk: theoretical analysis supported by illustrative case studies. / Hsu, Yu-Lin; Reid, Gavin.

2018. Abstract from 41st Annual Congress of the European Accounting Association, Milan, Italy.

Research output: Contribution to conferenceAbstract

TY - CONF

T1 - A two-stage model of decision-making over financial reporting regimes and techniques in the uk: theoretical analysis supported by illustrative case studies

AU - Hsu, Yu-Lin

AU - Reid, Gavin

PY - 2018/5/30

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N2 - This paper develops a new two-stage decision model to explain the choices of financial reporting regimes (e.g. IFRS or UK GAAP) and techniques (e.g. valuing intangibles, by cost, income or market methods) for UK companies. The theoretical framework is based on the choice theory of orderings (Lex and CoLex), and is expressed in decision trees which capture firms’ actions, based on calibrated benefits and costs. The decision-making processes are examined through three UK empirical case studies (one private and two public firms), that expound their decision trees, and explain their decisions. We probe the rationale of their decisions using field-work investigation methods, through which we develop a ‘stated preference’ metric of choice, which allows us to interpret how decisions are made, and how they differ: over time (notably when regime changes are being implemented e.g. the emergence of New UK GAAP post-2015); and across firms (where factors like ease of execution and the quality and quantity of information needed for decisions, are shown to play a large part).

AB - This paper develops a new two-stage decision model to explain the choices of financial reporting regimes (e.g. IFRS or UK GAAP) and techniques (e.g. valuing intangibles, by cost, income or market methods) for UK companies. The theoretical framework is based on the choice theory of orderings (Lex and CoLex), and is expressed in decision trees which capture firms’ actions, based on calibrated benefits and costs. The decision-making processes are examined through three UK empirical case studies (one private and two public firms), that expound their decision trees, and explain their decisions. We probe the rationale of their decisions using field-work investigation methods, through which we develop a ‘stated preference’ metric of choice, which allows us to interpret how decisions are made, and how they differ: over time (notably when regime changes are being implemented e.g. the emergence of New UK GAAP post-2015); and across firms (where factors like ease of execution and the quality and quantity of information needed for decisions, are shown to play a large part).

M3 - Abstract

ER -