A Model for Evaluating the Impacts of Qualitative Characteristics on the Usefulness of Financial Reporting

The objective of accounting is to provide useful information for the users offinancial reporting. The information is considered useful if it possessqualitative characteristics. In this regard, it is very important to examine therelationship between qualitative characteristics and usefulness of information.However, a literature review doesn’t contribute much to judge about therelationship between qualitative characteristics and the usefulness of financialreporting. This study aims to investigate the effects of qualitativecharacteristics on the usefulness of financial reporting. In this study, we haveused structural equations model (SEM) to analyze the data. The PLS, LISRELand SPSS software were used to test the model, research validity and researchreliability, respectively. The information of the study sample consisting of 185firms was analyzed during the period 2000 to 2013. Except forunderstandability, all other qualitative characteristics had an impact onusefulness. Conservatism also had negative effect on usefulness. Based on thefindings, it is recommended to omit conservatism from qualitativecharacteristics. Besides, considering that relevance has a greater impact on theusefulness than reliability, so it can be concluded that the users of financialstatements are looking for relevant information in their decision makingprocess and information reliability is a matter of secondary importance.

Keywords:

Attitude , intention , emotion , sponsorship