Applying the stated preference approach to the study of financial reports

Face-to-face interviews, using an interviewer and rapporteur, were conducted with Finance Directors of prominent UK organisations in Edinburgh, Glasgow, London, Slough, Chippenham, Bristol and elsewhere. Interviews were semi-structured, exploring financial reporting choices from the perspective of perceived costs and benefits. The choices involved financial reporting regimes (e.g. UK or International) and the financial reporting techniques which support them (e.g. valuing intangible assets and investments). Our analysis of this evidence is largely qualitative, exploring in-depth: (a) the key factors underpinning choices; (b) the decision processes behind choices; and (c) the efficacy of staging decisions. It is supported by a quantitative basis, using a novel metric for determining net benefits of financial reporting regimes and techniques. This analysis aims to improve our understanding of choice processes underlying a company’s financial reporting, including how it handles complexity and uncertainty, and how it uses innovations in techniques and organisational forms for superior decision support.