Two minds of credit professionals: accrual vs. cash accounting information

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Journal Title
Journal ISSN
Volume Title
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
Date
2022
Major/Subject
Mcode
Degree programme
Language
en
Pages
28
56-83
Series
INTERNATIONAL JOURNAL OF MANAGERIAL AND FINANCIAL ACCOUNTING, Volume 14, issue 1
Abstract
To explore in what ways and what elements of financial statement information is important for credit practitioners, we employ a survey method to obtain new evidence. We ask if there is evidence on the existence of two different types of views to accounting information, namely accrual accounting and cash accounting emphasis. The two views come out robustly throughout our analysis, and they are consistently linked both to credit professional's experience, and task complexity. We infer our evidence to be consistent with the explanations for co-existence of differential information preferences advanced in behavioural accounting literature related to individuals' cognitive constraints in use of accounting information. We discuss the implications of our results for credit professionals, accounting standard setters and researchers.
Description
Funding Information: The authors appreciate the comments of Alar Kein, Meelis Kitsing, Timo Laakso and Antti Miihkinen. Dr. Harri Seppänen’s work was partly funded by a research grant from Liikesivistysrahasto. The research funding source had no involvement with the design or execution of the study. Publisher Copyright: Copyright © 2022 Inderscience Enterprises Ltd.
Keywords
Accounting information, Accrual accounting, Behavioural, Cash accounting, Credit professionals, Experience, Financial statements, Information preferences, Limited attention, Rational inattention, Survey, Task complexity
Other note
Citation
Seppänen , H & Teinilä , T 2022 , ' Two minds of credit professionals: accrual vs. cash accounting information ' , INTERNATIONAL JOURNAL OF MANAGERIAL AND FINANCIAL ACCOUNTING , vol. 14 , no. 1 , pp. 56-83 . https://doi.org/10.1504/IJMFA.2022.120933