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Dissertation
The accounting standards overload issue: an empirical test of the effect of four selected financial accounting standards on the lending decisions of bankers
Doctor of Philosophy (Ph.D.), Drexel University
1985
DOI:
https://doi.org/10.17918/00009452
Abstract
The number of financial accounting standards has expanded rapidly since 1972, resulting in a concern in the accounting profession of accounting standards overload and the possible burden that it may place on the small or private company. The American Institute of Certified Public Accountants and the Financial Accounting Standards Board have expended a considerable amount of effort in evaluating the issue: Committees have been formed, invitations to comment have been circulated, and research studies have been sponsored. An empirical study, using a decision simulation design, was undertaken to determine if the modification of four financial accounting standards influenced the preliminary risk assessment or request for additional information by bank loan officers (BLOs) as they considered a request for a line of credit from a small, hypothetical company. In addition, an analysis was made of the possible effect of demographic factors on the decisions of BLOs who were asked to evaluate the usefulness of the financial statements provided to them. A set of financial statements that included modified treatments for APB No. 11 (Accounting for Income Taxes), SFAS No.13 (Acconting for Leases), SFAS No. 34 (Capitalization of Interest Costs), and excluded a statement of changes in financial position (APB No.19) resulted in a statistically significant difference in the BLOs' perceived usefulness of the financial statements. Those treatments, however, did not influence the BLOs' risk assessment or need for additional information. Several demographic factors influenced the decisions of the BLOs, the most notable being bank size. Finally, a significant correlation was found among perceived usefulness, risk assessment, and information needs. The results of the study suggest a possible approach to providing relief to the small company in complying with selected financial accounting standards, namely, disclosing information about income taxes, leases, and interest costs in the notes to the financial statements rather than in the body of the financial statements. A movement from certain complex measurement standards to less complex disclosure standards could provide the small company with some relief from accounting standards overload without denying the BLO information that BLOs perceive to be useful.
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Details
- Title
- The accounting standards overload issue
- Creators
- Kenneth Merrill Hiltebeitel
- Awarding Institution
- Drexel University
- Degree Awarded
- Doctor of Philosophy (Ph.D.)
- Publisher
- Drexel University; Philadelphia, Pennsylvania
- Number of pages
- viii, 253 pages
- Resource Type
- Dissertation
- Language
- English
- Academic Unit
- College of Business (and) Administration (1970-1999); Drexel University
- Other Identifier
- 991021888833904721