Shaida Fainally (1) Summary

Contents
Approval page ................................................................................................ Error! Bookmark not defined.

Declaration ..................................................................................................... Error! Bookmark not defined.
Acknowledgments .......................................................................................... Error! Bookmark not defined.
List of Figures ............................................................................................................................................... III
List of Tables ................................................................................................................................................. V
Abstract ..................................................................................................................................................... VIII
Chapter One: ................................................................................................................................................. 1
1.0 Introduction: ........................................................................................................................................... 1
1.1 Research Problem: .................................................................................................................................. 2
1.2 Research Objectives: ............................................................................................................................... 2
1.3 Importance of the research: ................................................................................................................... 2
1.4 Research Question: ................................................................................................................................. 2
1.5 Research Variables: ................................................................................................................................. 3
The have five variables in this research: ....................................................................................................... 3
1. Relevance .............................................................................................................................................. 3
2. Faithful Representation ......................................................................................................................... 3
3. Comparability ........................................................................................................................................ 3
4. Understandability .................................................................................................................................. 3
5. Timelines ............................................................................................................................................... 3
CHAPTER TWO............................................................................................................................................... 4
LITERATURE REVIEW ..................................................................................................................................... 4
2.1 Users of Accounting Information ............................................................................................................ 4
2.2 Qualitative Characteristics of Accounting Information ........................................................................... 6
Reliability: ...................................................................................................................................................... 8
2.3 The concept and objective of the financial statement: ........................................................................10
2.4 The Nature of Accounting as Information System ................................................................................11
Chapter Three: ............................................................................................................................................13
3.1: Research Type: .....................................................................................................................................13
3.2: Research Data ......................................................................................................................................13
3.3 Data Collection: .....................................................................................................................................13
3.3.1: Sample& population .........................................................................................................................13
3.3.2: Data Collection tool:..........................................................................................................................14
3.4 Data analysis methodology: ..................................................................................................................20
I
3.4.1 Descriptive analysis: ...........................................................................................................................20
Chapter Four ...............................................................................................................................................21
4.1 Reliability: ..............................................................................................................................................21
Valid.............................................................................................................................................................22
Chapter five: ................................................................................................................................................44
5.1: Conclusion: ...........................................................................................................................................44
References:..................................................................................................... Error! Bookmark not defined.
Abawi, D. K. (2013). Data Collection Instrumens (Questionnaire & Interview). 18-3. ..Error! Bookmark not
defined.
II
List of Figures
FIGURE 1 THE HISTOGRAM AND THE TABLE SHOW THAT THE EXTENT WHICH THE INCLUSION OF
NON-FINANCIAL INFORMATION, IN TERMS OF BUSINESS OPPORTUNITIES AND RISKS, ENHANCES
THE QUALITY OF FINANCIAL REPORTING, THE MAXIMUM RATE WERE MEDIUM=28.3 AND THE
MINIMUM WERE MUCH LIT ....................................................................................................... 23
FIGURE 2 THE EXTENT TO WHICH THE USE OF FAIR VALUE ACCOUNTING MEASUREMENT ENHANCES
THE QUALITY OF FINANCIAL REPORTING............................ ERROR! BOOKMARK NOT DEFINED.
FIGURE 3 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION IN TERMS OF HOW VARIOUS
MARKET EVENTS AND SIGNIFICANT TRANSACTIONS, ENHANCES THE QUALITY OF FINANCIAL
REPORTING. ....................................................................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 4 THE EXTENT TO WHICH THE INCLUSION OF ANALYSIS SECTION AND THE PROVISION OF
FEEDBACK INFORMATION TO USERS OF FINANCIAL STATEMENTS, ENHANCE THE QUALITY OF
FINANCIAL REPORTING. ..................................................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 5THE EXTENT TO WHICH THE PRESENCE OF INFORMATION WHICH EXPLAINS THE
ASSUMPTIONS AND ESTIMATES MADE IN THE PREPARATION OF FINANCIAL STATEMENTS
ENHANCES THE QUALITY OF FINANCIAL REPORTING. ......... ERROR! BOOKMARK NOT DEFINED.
FIGURE 6 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION WHICH EXPLAINS THE CHOICE OF
ACCOUNTING PRINCIPLES USED IN THE PREPARATION OF FINANCIAL STATEMENTS ENHANCES
FIGURE 7 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION WHICH HIGHLIGHTS THE
POSITIVE AND NEGATIVE EVENTS IN A BALANCED WAY ENHANCES THE QUALITY OF FINANCIAL
FIGURE 8 THE EXTENT TO WHICH THE TYPE OF AUDITORS REPORT (QUALIFIED OR UNQUALIFIED)
AFFECT THE QUALITY OF FINANCIAL REPORTING. .............. ERROR! BOOKMARK NOT DEFINED.
FIGURE 9 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION ON CORPORATE GOVERNANCE

ISSUES ENHANCES THE QUALITY OF FINANCIAL REPORTING............... ERROR! BOOKMARK NOT
DEFINED.
FIGURE 10 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION WHICH EXPLAINS THE
IMPLICATIONS OF THE CHANGES IN ACCOUNTING POLICIES ENHANCES THE QUALITY OF
III
FIGURE 11 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION WHICH EXPLAINS THE
IMPLICATIONS OF THE REVISION IN ACCOUNTING ESTIMATES AND JUDGMENT ENHANCES THE
QUALITY OF FINANCIAL REPORTING................................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 12 THE EXTENT TO WHICH THE ADJUSTMENT OF PREVIOUS ACCOUNTING PERIODS FIGURES,
FOR THE EFFECT OF THE IMPLICATION OF THE CHANGE IN ACCOUNTING POLICY ENHANCES THE
FIGURE 13 THE EXTENT TO WHICH THE PRESENCE OF COMPARATIVE FIGURES (CURRENT

ACCOUNTING PERIODS FIGURES COMPARED WITH THE PREVIOUS PERIODS RESULTS) ENHANCES
FIGURE 14 THE EXTENT TO WHICH INDUSTRY COMPARISON ENHANCES THE QUALITY OF FINANCIAL
REPORTING? ...................................................................... ERROR! BOOKMARK NOT DEFINED.
FIGURE 15 THE EXTENT TO WHICH THE INCLUSION OF FINANCIAL INDEX NUMBERS AND RATIOS
ENHANCES THE QUALITY OF FINANCIAL REPORTING? ........ ERROR! BOOKMARK NOT DEFINED.
FIGURE 16 THE EXTENT TO WHICH THE CLARITY OF FINANCIAL STATEMENTS, IN TERMS OF TABLE
OF CONTENTS, HEADINGS, ORDER OF COMPONENTS AND SUMMARY ENHANCES THE QUALITY OF
FIGURE 17 THE EXTENT TO WHICH THE DISCLOSURE OF INFORMATION IN NOTES TO THE FINANCIAL
STATEMENTS ENHANCES THE QUALITY OF FINANCIAL REPORTING..... ERROR! BOOKMARK NOT
DEFINED.
FIGURE 18 THE EXTENT TO WHICH THE USE OF GRAPHS AND TABLES IN THE FINANCIAL REPORTS
ENHANCES THE QUALITY OF FINANCIAL REPORTING. ............................................................... 40
FIGURE 19 THE EXTENT TO WHICH THE ABSENCE OF JARGONS AND TECHNICAL TERMINOLOGIES
ENHANCES THE UNDERSTANDABILITY OF FINANCIAL REPORTING, AND THUS ITS FINANCIAL
REPORTING QUALITY. ........................................................ ERROR! BOOKMARK NOT DEFINED.
FIGURE 20 THE EXTENT TO WHICH THE PRESENCE OF DETAILED GLOSSARY OF UNFAMILIAR TERMS
AND ABBREVIATIONS IN THE FINANCIAL STATEMENTS ENHANCES THE QUALITY OF FINANCIAL
FIGURE 21 THE EXTENT TO WHICH EARLY SIGNING OF AUDITOR'S REPORT AFTER THE BOOK-YEAR
END ENHANCES THE QUALITY OF FINANCIAL REPORTING... ERROR! BOOKMARK NOT DEFINED.
IV
List of Tables
TABLE 3- 1 FACTORS UNDERNEATH THE QUALITATIVE CHARACTERISTICS: RELEVANCE ....... ERROR!
BOOKMARK NOT DEFINED.
TABLE 3- 2 FACTORS UNDERNEATH THE QUALITATIVE CHARACTERISTICS: FAITHFULL
REPRESENTATION .............................................................. ERROR! BOOKMARK NOT DEFINED.
TABLE 3- 3 FACTORS UNDERNEATH THE QUALITATIVE CHARACTERISTICS: COMPARABILITY
.......................................................................................... ERROR! BOOKMARK NOT DEFINED.

TABLE 3- 4 FACTORS UNDERNEATH THE QUALITATIVE CHARACTERISTICS: UNDERSTANDABILITY
TABLE 3- 5 FACTORS UNDERNEATH THE QUALITATIVE CHARACTERISTICS: TIMELINESS ..... ERROR!
TABLE 4- 1 CASE PROCESSING SUMMARY ......................................................................................21

TABLE 4- 2 RELIABILITY STATISTICS ..............................................................................................21
TABLE 4- 3 THE EXTENT TO WHICH THE PRESENCE OF FORWARD-LOOKING INFORMATION
ENHANCES THE QUALITY OF FINANCIAL REPORTING .......... ERROR! BOOKMARK NOT DEFINED.
TABLE 4- 4 THE EXTENT TO WHICH THE INCLUSION OF NON-FINANCIAL INFORMATION, IN TERMS OF

BUSINESS OPPORTUNITIES AND RISKS, ENHANCES THE QUALITY OF FINANCIAL REPORTING

TABLE 4- 5 THE EXTENT TO WHICH THE USE OF FAIR VALUE ACCOUNTING MEASUREMENT
TABLE 4- 6 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION IN TERMS OF HOW VARIOUS
MARKET EVENTS AND SIGNIFICANT TRANSACTIONS, ENHANCES THE QUALITY OF FINANCIAL
TABLE 4- 7 THE EXTENT TO WHICH THE INCLUSION OF ANALYSIS SECTION AND THE PROVISION OF
FEEDBACK INFORMATION TO USERS OF FINANCIAL STATEMENTS, ENHANCE THE QUALITY OF
V
TABLE 4- 8 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION WHICH EXPLAINS THE
ASSUMPTIONS AND ESTIMATES MADE IN THE PREPARATION OF FINANCIAL STATEMENTS
TABLE 4- 9 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION WHICH EXPLAINS THE CHOICE
OF ACCOUNTING PRINCIPLES USED IN THE PREPARATION OF FINANCIAL STATEMENTS
TABLE 4- 10 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION WHICH HIGHLIGHTS THE
POSITIVE AND NEGATIVE EVENTS IN A BALANCED WAY ENHANCES THE QUALITY OF FINANCIAL
TABLE 4- 11 THE EXTENT TO WHICH THE TYPE OF AUDITORS REPORT (QUALIFIED OR UNQUALIFIED)
AFFECT THE QUALITY OF FINANCIAL REPORTING. .............. ERROR! BOOKMARK NOT DEFINED.
TABLE 4- 12 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION ON CORPORATE GOVERNANCE

ISSUES ENHANCES THE QUALITY OF FINANCIAL REPORTING............... ERROR! BOOKMARK NOT
DEFINED.
IMPLICATIONS OF THE CHANGES IN ACCOUNTING POLICIES ENHANCES THE QUALITY OF
IMPLICATIONS OF THE REVISION IN ACCOUNTING ESTIMATES AND JUDGMENT ENHANCES THE
TABLE 4- 15 THE EXTENT TO WHICH THE ADJUSTMENT OF PREVIOUS ACCOUNTING PERIODS

FIGURES, FOR THE EFFECT OF THE IMPLICATION OF THE CHANGE IN ACCOUNTING POLICY
TABLE 4- 16 THE EXTENT TO WHICH THE PRESENCE OF COMPARATIVE FIGURES (CURRENT

ACCOUNTING PERIODS FIGURES COMPARED WITH THE PREVIOUS PERIODS RESULTS) ENHANCES
TABLE 4- 17 THE EXTENT TO WHICH INDUSTRY COMPARISON ENHANCES THE QUALITY OF

FINANCIAL REPORTING? .................................................... ERROR! BOOKMARK NOT DEFINED.
TABLE 4- 18 THE EXTENT TO WHICH THE INCLUSION OF FINANCIAL INDEX NUMBERS AND RATIOS
ENHANCES THE QUALITY OF FINANCIAL REPORTING? ........ ERROR! BOOKMARK NOT DEFINED.
TABLE 4- 19 THE EXTENT TO WHICH THE CLARITY OF FINANCIAL STATEMENTS, IN TERMS OF TABLE
OF CONTENTS, HEADINGS, ORDER OF COMPONENTS AND SUMMARY ENHANCES THE QUALITY OF
VI
TABLE 4- 20 THE EXTENT TO WHICH THE DISCLOSURE OF INFORMATION IN NOTES TO THE
FINANCIAL STATEMENTS ENHANCES THE QUALITY OF FINANCIAL REPORTING. .............. ERROR!

TABLE 4- 21 THE EXTENT TO WHICH THE USE OF GRAPHS AND TABLES IN THE FINANCIAL REPORTS
TABLE 4- 22 THE EXTENT TO WHICH THE ABSENCE OF JARGONS AND TECHNICAL TERMINOLOGIES
ENHANCES THE UNDERSTANDABILITY OF FINANCIAL REPORTING, AND THUS ITS FINANCIAL
REPORTING QUALITY. ........................................................ ERROR! BOOKMARK NOT DEFINED.
TABLE 4- 23 THE EXTENT TO WHICH THE PRESENCE OF DETAILED GLOSSARY OF UNFAMILIAR

TERMS AND ABBREVIATIONS IN THE FINANCIAL STATEMENTS ENHANCES THE QUALITY OF
TABLE 4- 24 THE EXTENT TO WHICH EARLY SIGNING OF AUDITOR'S REPORT AFTER THE BOOK-YEAR
END ENHANCES THE QUALITY OF FINANCIAL REPORTING... ERROR! BOOKMARK NOT DEFINED.
VII
Abstract
The study seeks to examine the characteristics of the accounting information as they are mirrored
by the accounting standards in the financial spectrum. Accounting data provide in-depth
information that are of great importance to consumers, analysts, reporters and all financial
players. Through the analysis financial information, standards are set which govern how the
information is presented, the format in which they appear and what must be included to make
qualitative and informative financial reports. The study will thus attempt to link this information
by the regional requirements by the accounting units. Also, there exists a spectrum of
presentations and the impacts of these qualitative aspects of financial reports and their
characteristics inform the accounting forecasters in preparing fiscal statements. The aims to
achieve its main objectives will be therefore be examined. These objectives focus on the
intentions of financial statements. Lastly, the most important qualitative characteristics of
accounting information will be substantiated and recommendations given on how reforms can be
implemented to foresee better fiscal futures and suggest ways of promoting good corporate
governance practices. The paper will thus provide, or attempt to, the qualities of a
comprehensive financial statement based on financial standards, define a financial statement, and
indicate the appropriateness of the accounting information provided by the accounting units in
the respective region. The qualitative characteristics of the accounting will be summarized and
the objectives of a financial statements stated clearly.
Key word: Oprationalizing the qualitative characteristics of financial reporting.

VIII
IX
Chapter One:
1.0 Introduction:
The main objective for accounting is to produce accounting information and deliver them to the end
users. Accounting information is considered the most important element on which all external and
internal parties in any economic unit depend on in making or rationalizing organizational decisions
and for most other activities.
Accounting information reports and financial statements are the main medium by which such
information are communicated to users. In order for the information presented in the financial
statements to be useful, it must have a certain level of quality and a set of qualitative characteristics
of the basic information and comply with the adequacy and reliability, Sub-characteristics,
secondary characteristics, representations and readability. Other characteristics related to the users
of this information, the level of understanding, perception they have and the nature of the sources of
information and their ability to analyze them.
To highlight the importance of this subject, we chose to study and research the possibility of having
the resources and specializations availability in the state’s factories and their ability to analyses
them. Statement of Accounting Concepts SAC 2 "Objective of General Purpose Financial
Reporting" identifies the objective of general purpose financial reporting as the disclosure of
information useful to users for making and evaluating decisions about the allocation of scarce
resources. When general purpose financial reports meet this objective they will also be the means by
which preparers of such reports discharge their accountability to those users. The purpose of this
Statement is to identify those attributes (hereinafter "qualitative characteristics") that financial
information should possess if it is to serve the specified objective. In an ideal situation, the entities
in the trade, for example, managers should be able to define the kind of information they need, and
accounting information system should be able to provide them in a timely manner, but in practice
this is not always possible.
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1.1 Research Problem:
The decisions of investment in the paper securities depend on the information disclosed in the yearly
financial reports. Due to the time period in the yearly reports and stakeholders for this information
for the purpose of rationalizing their investment decisions and so as to accomplish the need of the
investors and increases their benefits, the interval financial reports are relied upon. Hence came this
study to measure the quality of the interval financial reports by using the qualitative characteristics
of the accounting information and their effects on the investment decisions.
1.2 Research Objectives:

1. Show the important characteristics of the accounting information as reflected in the
accounting standards.
2. To indicate the appropriateness of the accounting information provided by the accounting
units in the Region.
3. Show the range impact of qualitative characteristics for accounting information at
preparing financial statement to achieve the main objective of accounting.
4. The objective focuses on the intention of financial statement.
5. Show the most important qualitative characteristics of accounting information.
1.3 Importance of the research:

Show the extent availability of accounting information on service specific decisions, contribute to
more effective management in making good decision, and the availability of qualitative
characteristics or basic rules to be used to estimate accounting information.
1.4 Research Question:

1. What the important quality characteristics of the accounting information is as reflected in the
accounting standards?
2. What is the financial statement and why is it important?
2
3. How to indicate the appropriateness of the accounting information provided by the
accounting units in the Region?
4. What are the qualitative characteristics of accounting?
5. What are the objectives of financial statements?
1.5 Research Variables:
The have five variables in this research:
1. Relevance
2. Faithful Representation
3. Comparability
4. Understandability
5. Timelines
3
CHAPTER TWO
LITERATURE REVIEW
2.1 Users of Accounting Information
Modern corporations use accounting information system for providing information to people so they
can decide better. That is why accounting is often considered as tongue of trade. Different kind of
users are benefited from accounting information system and they can be classified in two groups,
external and internal users which is demonstrated in exhibit 1.2.
External information users: Shareholders, directors, legal associates, lenders, customers,

regulators, brokers, suppliers, media associates these members are considered as external
information users. Usually they do not take direct part in managing the commercial institution.
Although many of their vital steps relies on information that is dependable, corresponding and
pertinent.
Financial accounting is the part of accounting designed to assist external users by delivering them
financial statements. In corporate world these are called general purpose financial statements. Wide
range of purpose for which external users depend on these statements named as general purpose
Depending on what steps a user going to take every external user requires some particular
information. Those who loan money or other credits to a commercial or business institution are
called lenders. Some examples of lenders are banks, co-ops, savings and loans, finance and
mortgage companies. Lenders need to evaluate what possibilities of pay back a company or
institution has with internal. So, they search for information that will help them evaluate. Buying,
holding or selling stocks are the decisions of investors or shareholders as they own the organization.
They depend on accounting reports to make those decisions. A board of directors are employed by
shareholders to supervise their stakes. As directors maintain the interests of shareholders they search
for the same data as shareholders. Independent auditors from out of organization come and check
financial statements to justify their preparation according to common accounting standards. To
assess the justification of salary, to determine demanding jobs, to demand increment jobholders and
worker unions uses financial statements. Over some programs of corporations sometimes regulators
4
have legal power. As an instance, for calculating tax internal revenue service and some tax
departments ask corporations to provide accounting reports. Regulators such as, utility department
charges the corporations according to accounting reports. Some organizations sell their stock to
public; security regulators ask for their accounting data.
Accounting help many other external users to find their requirements. Lawmakers, voters and
government employees uses accounting information to supervise and analyze a government’s
receipts and expenditures. To determine the utilization and effect of their contribution different
donors are benefited from accounting information system. Suppliers need to understand if a client is
reliable for making sales on credit and clients need accounting reports to evaluate potential of a
supplier to deliver. Both of them uses accounting information system according to their
requirements.
Internal information users: Those who participate in running and controlling a business entity by
working within the entity are called internal users of accounting information. To decide better
internal users, use managerial accounting. Aiming at particular inquiries of internal users’ internal
financial reports are different than external reports.
Among different type of internal users, most are executives, managers and departmental heads. They
handle vital operations to run a business entity. Research and development officials require reports
about estimated expenses and profit of a recommended changes in a commodity or service. Buying
managers require the information about the quantity and type of product to buy. Executives in
department of human resources eager to know the jobholder’s salary, accomplishments,
remuneration and perk or advantages. To maintain quality and manage expenses production
managers rely upon financial reports. Reports on precise, within time and effective delivery of
services, reports about sales and expenses are available in accounting information system.
Distribution executives and officials require these reports to target clients, pricing, and understand
client’s choices, demands and budget. To monitor product and services service managers require to
know about expenses and benefits. Both external and internal users depend on internal governance
for observing and running the company. Internal governing means regulations used to maintain
organizations assets and resources, secure solid financial reports, encourage effectiveness, promote
loyalty to company regulations, valuing good performers and set up physical safety measures.
5
2.2 Qualitative Characteristics of Accounting Information
Would it be wise if organizations like Cathay pacific airways Ltd. (HKG) or Nippon Steel (JPN)
publish reports on their financial statements on the expenses they did for buying properties
(historical cost basis) or those properties present value (fair value basis)? PepsiCo Beverages, Frito
Lay, Quaker Foods, and PepsiCo International are four segments of PepsiCo (USA). Should they
present their reports as one or four different organizations?
How does a business entity decide for a standard accounting system, the quantity and kinds of
information to reveal, and the layout in which to disclose it? Answer is a decision useful system.
Meaning they need to select the option that gives most necessary information for making right
decision. According to IASB qualitative characteristics of accounting information that separates
useful information from comparatively unnecessary information for right decision. Furthermore,
IASB declared some matters (cost and materiality) as a segment of hypothetical framing. According
to illustration the characteristics can be called as a scaling.
According to illustration 2-2 qualitative characteristics are either essential or better characteristics
based on how they influence the decisions effect on information. In spite of differences in
classification every qualitative characteristic of helps the decision efficiency of financial reporting
information. Financial reporting cost and materiality are two influential aspects which bounds
gathering of important information. (Kieso, Weygandt, & Warfield, 2010)
Relevance: between two basic fundamental qualities for which accounting information becomes
vital for decision making relevance is one. Below are described fundamental quality relevance and
its affiliated features.
Irrelevant information are those which has no hold over a decision. That information which are able
to influence change in a decision is relevant. Information can make a change having either predictive
or confirmatory value or both (Kieso, Weygandt, & Warfield, Intermediate Accounting, 2010)
As capital generators decisions chosen by users as per their ability and which decisions can be
influenced by information. IASB defines this information as relevance. Predictive and confirmatory
values are two terms which usually dictates relevance. The information on a company’s capability to
6
create future cash flow is called predictive value. If a business infrastructure has value as an input to
predictive methods used by capital generators to make their own anticipation about following
periods, then according to IASB it has predictive value.
Considering decision effectiveness predictive value is regarded as a vital factor of relevance. The
fundamental parameters of predictive value according to Van Beest et al (2002) are: 1) when yearly
reports deliver foreseeing statements, 2) whether the yearly analysis reveals information in terms of
business possibilities and dangers, 3) if the organization use correct value. The foreseeing statements
normally refers executives’ anticipations for upcoming years of the organization. This information
has relevance to users and capital generators who uses yearly reports as executives have link to
confidential information to create a prediction which is unavailable to other stakeholders . Both
financial and nonfinancial data should be contained in a relevant financial report. This information
can enlighten users with dangers and possibilities of business as well as company’s future .Early
studies show that fair value offers a better predictive value of financial reporting information than
historical cost. According to them fair value accounting generates more relevant information than
historical cost. This system cannot differentiate between discretionary and non-discretionary
accruals . This is a main drawback of this method. Besides this method gives no direct solution for
financial reporting quality. (Mbobo & Ekpo, 2016)
Comparability: Another important qualitative characteristic is comparability. According to IASB

(2008) comparability is the quality of information that allows one to distinguish resemblance and
dissimilarities between two sets of business model. This implies that system for presenting similar a
different situation should not be changed. Six items are used to evaluate comparability. In a business
society, all companies use same accounting rules and regulations and comparability. These six
points determine the consistency. Particularly these points are:
1) Notes to modify accounting regulations and clarify the implications of the modification.
2) Notes to alter accounting assessment and evaluations clarifying the applications of altering.
3) When corporation edits former accounting reports, for the influence of application of a
modification in accounting regulations and readjustments in accounting assessment.
7
4) When organizations give a collation of conclusion of present years accounting reports with early
years report.
5) When result in yearly report is comparable with results given by other organizations.
6) When financial index numbers and ratios are provided in the yearly report. (Mbobo & Ekpo,
2016)
If a business infrastructure has value as an input to predictive methods used by shareholders to

make their own anticipation about following periods, then it has predictive value. for instance, if
possible, financiers are eager to buy general shares in Stora Enso (NLD), they may investigate the
present assets and legal proof of those assets owned by it, its dividend payments, its former income
details to calculate the quantity, timing and in assurance of Stora Enso’s future cash flows. (Kieso,
Weygandt, & Warfield, Intermediate Accounting, 2010)
Timeliness: timeliness refers to have information accessible to decision makers before its ability to
affect decisions are lost. Acquiring right information earlier can increase its ability to affect
decisions and absence of timeliness can make an information useless (Kieso, Weygandt, &
WARFIELD, Intermrdiate Accounting, 2010). timeliness is last important qualitative characteristics
describe in ISAB (2010) conceptual framework. the framework states that timeliness refers to have
information accessible to decision makers before its ability to affect decisions are lost . in certain
terms timeliness and decision efficiency of accounting report are comparable to each other. It means
the time it needs to disclose information in yearly analysis. Generally, it is computed by the no. Of
days an auditor requires to sign the accounts at the end of year. (Mbobo & Ekpo, 2016)
Reliability:
Faithful representation: it refers as numerical and portrayal resemblance of what actually occurred.
Most users do not have ample time and experience to justify and information that is why faithful
representation is important. (Kiseo, Weygandt, & Warfield, 2010)
In ISAB (2008) framework faithful representation was stated as second basic qualitative
characteristic. Full, fair and accurate yearly report which will be represented faithfully in a business
8
model, stated by ISAB. According to ISAB (2008) business model demonstrated in yearly report are
financial assets, commitments and the payment and other operations and conditions that alter them.
Faithful representation is usually determined from fairness, accuracy, conclusiveness and
authenticity. Botosan (2004) argues that it is tough to determine faithful representation straight
forward by just evaluating the yearly report, as information about the original business model is vital
to ensure faith ful representation. Although Maines and Wahlen (2006) states that, controlling that
evaluation and supposition that nearly resemble to the economic structure and the regulations
maintained can increase faithful representation. Generally, we need to consider 4 things to determine
faithful representation.
1) Liberty from prejudice.
2) fairness
3) disqualified audit report
4) company policy statements. .
To be neutral financial reports should explicitly clarify suppositions and evaluations done for
preparing financial statements and preferences of accounting standards. A financial report is
supposed to be neutral if it mentions both positive and negative circumstances in a balanced method.
(Mbobo & Ekpo, Operationalising the Qualitaitive chararactirstics of financial reporting, 2016) .
Understandability: According to ISAB (2008) first important qualitative characteristic is

understandability. IASB (2008) states that for an enhanced understandability the information should
be confidential, defined and portrayed precisely and with summarization to allow users to
understand what they mean. Understandability is determined by using five items employment,
titling, and work knowledge. Section B, the most important part of questionnaire was targeted at
collecting users’ preferences for their views on the determination of the standard of financial
reporting. Final sub section of this section includes comments on maintaining the quality of financial
reporting. The answers from this part creates the foundation of this study. A four point’s likert scale
method was used designing these comments. The survey equipment went through dependability and
9
validity tests (Mbobo & Ekpo, Operationalising the Qualitaitive chararactirstics of financial
reporting, 2016).
Verifiability: happens when self-reliant methods, using the similar systems, concludes same. It
happens in following circumstances. (Kieso, Weygandt, & Warfield, Intermediate Accounting,
2010)
Neutrality: it refers that an organization cannot be biased regarding information for different clients
over other. Neutral information must be of foremost importance. (Kieso, Weygandt, & WARFIELD,
Intermrdiate Accounting, 2010)
2.3 The concept and objective of the financial statement:
Income statement: For a certain period of time the accomplishment of an organization is

determined by income statement. (Often regarded as statement of income or earning statement). The
business a financial society use the income statement to understand remunerative, investment worth
and credit repaybility. Creditors and investors collect information from income statement to assume
the quantity, timing and unpredictability of future cash flows. (book, intermediate accounting)
(KIESO, WEYGANDT, & WARFIELD, 2010)
Statement of financial position (balance sheet): Balance sheet or financial position statement
reports the resources, drawbacks and transparency of a business entity at a certain data. Commitment
to creditors, neutrality of resources quantity and type of investment in entity assets are detailed in
this financial statement. So, it helps the quantity, timing and unpredictable nature of future cash
flows. (Kieso, WEYGANDT, & Warfield, Intermedeat Accaunting, 2010)
Cash flow: Compositions in bold italic font and plain font with equal authority are included in this
accounting statement. Composition in italic font shows the main purposes. This account standard
should be gone through in the context of its intent and the usual instructions included in section A of
the annexure to the notification. (Walther & Skousen, 2009)
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2.4 The Nature of Accounting as Information System
Usefulness of the income statement
Users of financial statements assume upcoming cash flows in several ways from income statement.
Investors and creditors use this report in following ways:
i. It helps to assess previous achievement of the entity. Organizations position in the

competition with its rival is measured by investigating cost and profit of the company. For
instance, to determine accomplishment of Hyundai (KOR) against Toyota (JPN) their
income statement is used.
ii. It gives a foundation to determine following years goals. Knowledge about previous year’s
performance aids to understand vital trends that, if goes on, give information about
upcoming years planning and goals. For instance, General electric (GE, USA) at one time
saw continuing amount of profit. Although future profits do not depend on past results.
However, analyst is adept at assuming future prospects, profits and cash flows, if past and
future performances correlates soundly.
iii. Helps to find out dangers of facing future cash flow. Information on different element of
income revenues, costs, profits, damages indicates the connections among them. It also
assists to evaluate the dangers of underachieving cash flows in upcoming years. As an
example we can look at Siemens AG(DEU) . investors and creditors sometimes isolate
Siemens continuing projects from stopped projects as Siemens mainly gets its income from
ongoing operations. So, findings from ongoing projects are more influencing for assuming
future planning and goals.
In short, income statement is used for assessing previous results as it contains information about
revenue, cost, and profits. It also helps to determine future cash flow. (KIESO, WEYGANDT, &
WARFIELD, 2010)
Usefulness of the statement of financial position (balance sheet):
The statement of financial position delivers a foundation for calculating return rates and assessing
the capital backbone of the entity as it contains the information about resources, drawbacks, and
11
equity. To determine company’s damage and upcoming cash flows analyst take help from the
information in this document. For this analyst uses balance sheet to evaluate organizations liquidity,
solvency and economic flexibility. Liquidity indicates, desirable amount of time for a property to be
converted to cash or a liability is due. Short period liquidity ratio attracts creditors such as near cash
or ration of cash to short period liability. These ratios describe if an entity for example Adidas
(DEU) will be able to pay their ongoing and increasing commitments. In the same way, shareholders
evaluate liquidity to assess the risk of future cash dividends or share buybacks. In simple high
amount of liquidity in Adidas decrease its chance of collapsing. (Kieso, WEYGANDT, & Warfield,
Intermedeat Accaunting, 2010)
12
Chapter Three:
3.1: Research Type:

Quantitative research is in its basic sense a collection of numerical data based on which hypotheses
can be tested. It is based on a large body of data from which small amounts of information can draw.
On the other hand, qualitative research is a research strategy that deals more with description and
words instead of numbers in the collection of data and during the analysis. It is connected to
inductive approach and aims at describing phenomenon qualities. The qualitative method doesn’t try
to set value on object of research instead it describes why something is connected to the other parts
of that same object. (Jonsson, 2014)
3.2: Research Data

In this research, data can be classified as primary data and secondary data .In this research secondary
data has been collected from books and journals that are related to the literature review, the Primary
data has been collected through the questionnaire. (Mohammedamin, 2014)
3.2.1: Secondary data: Sources Represented by the books, International journals, and specialized
electronic sites research include data and into the study subject or information the serve this
research. (AL-Shatnawi, 2017)
3.2.2: Primary data: Primary sources in order to obtainable the primary data urgent(necessary) for
testing a questionnaire was development (AL-Shatnawi, 2017)
3.3 Data Collection:

3.3.1: Sample& population: In this r research, data was collected from public and private
Banks and companies. Totally I conduct 53 questionnaires in English languages all of them were
received from the partaker. I could just reach 6 banks and 3 companies. One of the bank was public
and 5 these banks were privet, and 3 these companies were privet. 53 Employees worked in public
and private companies and banks that was my total sample size. (JALAL, 2015)
13
3.3.2: Data Collection tool:
Questionnaire A questionnaire is a data collection apparatus Regular of a series questions and other
prompts for the roles of gathering information from respondents.. (Abawi, 2013)
In this research I used quantitative methods is based on a review of international Journal of finance
and accounting research papers and survey. The primary questionnaires has been collected through.
These questionnaires were available in English languages and questions’ part. The questions parts
were 4 tables ; first table have 5 questions and second table 6, and third table 5 questions ,and table
close end 1 question. The question part was consisted of 22 questions. Based on 5 scales from very
little extent to medium to large extent. (Mbobo & Ekpo, Operationalising the Qualitaitive
chararactirstics of financial reporting, 2016)
14
Table 3- 1 factors underneath the qualitative characteristics: relevance
Very Little Medium Large Very

little extent extent large
Questions for relevance
extent extent
1 2 3 4 5
1. The extent to which the presence of forward-
looking information enhances the quality of
financial reporting
2. The extent to which the inclusion of non-
financial information, in terms of business
opportunities and risks, enhances the quality of
financial reporting.
3. The extent to which the use of fair value
accounting measurement enhances the quality of
financial reporting
4. The extent to which the presence of information
in terms of how various market events and
significant transactions, enhances the quality of
financial reporting
5. The extent to which the inclusion of analysis
section and the provision of feedback
information to users of financial statements,
enhance the quality of financial reporting.
15
Table 3- 2 factors underneath the Qualitative Characteristics: Faithfull Representation
Very little Little Mediu Large Very large

Questions for Faithfull Representation extent extent m extent extent
1 2 3 4 5
1. The extent to which the presence of
information which explains the
assumptions and estimates made in the
preparation of financial statements
enhances the quality of financial reporting.
information which explains the choice of
accounting principles used in the
preparation of financial statements
information which highlights the positive
and negative events in a balanced way
4. The extent to which the type of
Auditors report (qualified or unqualified)
affect the quality of financial reporting.
information on corporate governance
issues enhances the quality of financial
reporting.
16
Table 3- 3 factors underneath the qualitative Characteristics: Comparability
Very little Little Medium Large Very large

Questions for Comparability extent extent extent extent
1 2 3 4 5
implications of the changes in
accounting policies enhances the
quality of financial reporting
implications of the revision in
accounting estimates and judgement
enhances the quality of financial
reporting
3. The extent to which the adjustment of
previous accounting periods figures, for
the effect of the implication of the
change in accounting policy enhances
the quality of financial reporting.
comparative figures (current accounting
periods figures compared with the
previous periods results) enhances the
quality of financial reporting.
5. The extent to which industry
comparison enhances the quality of
financial reporting?
6. The extent to which the inclusion of
financial index numbers and ratios
enhances the quality of financial reports
17
Table 3- 4 Factors underneath the Qualitative Characteristics: Understandability
Very Little Medium Large Very

Questions for Understandability little extent extent large
extent extent
1 2 3 4 5
1.The extent to which the clarity of financial
statements, in terms of
table of contents, headings, order of components and
summary enhances the quality of financial reporting.
2. The extent to which the disclosure of information in
notes to the financial statements enhances the quality
of financial reporting
3. The extent to which the use of graphs and tables in
the financial reports enhances the quality of financial
reporting.
4. The extent to which the absence of jargons and
technical terminologies enhances the
understandability of financial reporting, and thus its
financial reporting quality.
5. The extent to which the presence of detailed
glossary of unfamiliar terms and abbreviations in the
financial statements enhances the quality of financial
reporting.
18
Table 3- 5 Factors underneath the Qualitative Characteristics: Timeliness
Very
Very
Little Large large
Questions for Timeliness little Medium
extent extent exten
extent
t
1 2 3 4 5
The extent to which early signing of Auditor's report
after the book-year end enhances the quality of
19
3.4 Data analysis methodology:
3.4.1 Descriptive analysis:

Illustrative analysis such as frequencies, percentile analysis, mean, standard digression, and
coefficient of variation have been adopted. Particularly analysis such as A-square test and E test
have also been done by using statistical software SPSS in the current study in order to achieve the
concrete result.
3.4.2 Frequency analysis:
During the expressive statistics manufacturer delineated devious is helpful for summarizing data
with an basic continuous sharing out the expressive manufacture will not determine useful for
explaining categorical data, or else , it is more helpful to analyze the numbers of sample that into
several categories. The frequencies choose at all times you to option the number of people into each
education level in the dataset. (Jaggl S. , 2015)
3.4.3 Central tendency:
The central tendency of sharing out is an evaluation of the center of a sharing out of advantages.
There are three main types of evaluation:
 Mean
 Standard division
The mean or average is suitable the majority general used method of depicting centrally tendency. It
is the greatest general measure of central tendency. To calculate the mean, all the advantages are
count up and separated by the number of advantage. (Jaggl s. , 2015)
The Standard Division display the correlation that collection of grades has to the mean of the
sample. The standard deviation is the square root of the total squared deviations from the mean
distribute by the number of grades minus one. (Jaggl s. , 2015)
20
Chapter Four
4.1 Reliability:
Reliability test using Alpha Cranach’s used to test the reliability the scale. The results showed that,
For the Alpha Cornbrash’s by using reliability test , the result of this alpha equal .950 its show that
the result is reliable because its more than 0.7. if the alpha runback’s is more than 0.7 its mean
reliable (Shaban & Al-Zubi)
Scale: alpha
Case Processing Summary
N %
Cases Valid 53 100.0
Excluded 0 .0
Total 53 100.0
a. List wise deletion based on all
variables in the procedure.
Table 4- 1 Case Processing Summary
Reliability Statistics
Cornbrash’s
Alpha N of Items
.950 22
Table 4- 2 Reliability Statistics
4.2 Descriptive analysis:

In this research, the opinions of the respondents will be analyzed using the frequency and central
tendency analysis which were explained in the previous chapter.
21
Table 4- 3 The extent to which the presence of forward-looking information enhances the quality of financial reporting
Valid Cumulative
Frequency Percent Percent Percent
Very little 7 13.2 13.2 13.2
Valid extent
Little extent 13 24.5 24.5 37.7
Medium 15 28.3 28.3 66.0
Large extent 10 18.9 18.9 84.9
Very large 8 15.1 15.1 100.0
extent
Total 53 100.0 100.0
Figor1 A1: from the Histogram and the chart we found that the extent to which the presence of forward-
looking information enhances the quality of financial reporting, the medium rate is the maximum rate of the
sample size the medium=28.3, and the minimum rate is the very little extent the sample size=13.2, and from
the 53 sample size we found the mean is 2.98, and the standard division is 1.263.
22
Table 4- 4 the extent to which the inclusion of non-financial information, in terms of business opportunities and risks,
enhances the quality of financial reporting
Valid Cumulative
Valid Very little 6 11.3 11.3 11.3
extent
Little extent 12 22.6 22.6 34.0
Medium 15 28.3 28.3 62.3
Large extent 9 17.0 17.0 79.2
Very large 11 20.8 20.8 100.0
extent
Total 53 100.0 100.0
Figure 1 the Histogram and the table show that the extent which the inclusion of non-financial information,
in terms of business opportunities and risks, enhances the quality of financial reporting, the maximum rate
were medium=28.3 and the minimum were much lit.
23
Table 4- 5 The extent to which the use of fair value accounting measurement enhances the quality of financial
reporting.
Valid Cumulative
extent
Little extent 10 18.9 18.9 32.1
Medium 12 22.6 22.6 54.7
Large extent 14 26.4 26.4 81.1
Very large 10 18.9 18.9 100.0
extent
Total 53 100.0 100.0
Figer3 A3: The Histogram and the table show that the extent to which the use of fair value accounting
measurement enhances the quality of financial reporting, the maximum rate were Large extent=26.4 and the
minimum were very little extent =13.2, and the standard division =1.316, and the mean =3.19 from the 53
sample size.
24
Table 4- 6 The extent to which the presence of information in terms of how various market events and significant
transactions, enhances the quality of financial reporting.
Valid Cumulative
extent
Little extent 6 11.3 11.3 17.0
Medium 18 34.0 34.0 50.9
Large extent 15 28.3 28.3 79.2
Very large 11 20.8 20.8 100.0
extent
Total 53 100.0 100.0
Figer4 A4: from the Histogram and table the extent to which the presence of information in term of how
various market events and significant transactions, enhances the quality of financial reporting, the result
(from the 53 sample size the mean equal 3.47 and the standard division equal 1.12,, and the maximum rate
equal to 30.0 which mean medium and the minimum rate equal to 5.7 which mean very little extent).
25
Table 4- 7 The extent to which the inclusion of analysis section and the provision of feedback information to users of
financial statements, enhance the quality of financial reporting.
Valid
Frequency Percent Percent Cumulative Percent
V
Very little 2 3.8 3.8 3.8
aextent
lLittle extent 8 15.1 15.1 18.9
iMedium 14 26.4 26.4 45.3
dLarge extent 13 24.5 24.5 69.8
Very large 16 30.2 30.2 100.0
extent
Total 53 100.0 100.0
Figer5 A5: The Histogram and the table show that the extent to which that inclusion of analysis section and
the provision of feedback information to users of financial statement, enhance the quality of financial, the
maximum rate were very large extent=30.2 and the minimum were very little extent=3.8, and the standard
division=1.18, and the mean=3.62 from the 53 sample size.
26
Table 4- 8 The extent to which the presence of information which explains the assumptions and estimates made in the
preparation of financial statements enhances the quality of financial reporting.
Valid Cumulative
extent
Medium 16 30.2 30.2 52.8
Large extent 13 24.5 24.5 77.4
Very large 12 22.6 22.6 100.0
extent
Total 53 100.0 100.0
Figer6 B1: The Histogram and the table show that the extent to which the presence of information which
explains the assumptions and estimates made in the preparation of financial statements enhances the quality
of financial reporting, the maximum rate were medium=16 and the minimum were very little extent=
11.3,and little extent=11.3, and the standard division=1.272, and the mean=3.36 from the sample size.
27
Table 4- 9 The extent to which the presence of information which explains the choice of accounting principles used in
the preparation of financial statements enhances the quality of financial reporting.
Valid Cumulative
extent
Medium 14 26.4 26.4 47.2
Large extent 19 35.8 35.8 83.0
Very large 9 17.0 17.0 100.0
extent
Total 53 100.0 100.0
explains the choice of accounting principles used in the preparation of financial statements enhances the
quality of financial reporting, the maximum rate were large extent=35.8, and the minimum were little
extent=9.4, and the standard division=1.213, and the mean=3.38, from the 53 sample size.
28
Table 4- 10 The extent to which the presence of information which highlights the positive and negative events in a
balanced way enhances the quality of financial reporting.
Valid Cumulative
extent
Medium 16 30.2 30.2 50.9
Large extent 17 32.1 32.1 83.0
Very large 9 17.0 17.0 100.0
extent
Total 53 100.0 100.0
highlights the positive and negative events in a balanced way enhances the quality of financial reporting, the
maximum rate were large extent=32.1, and the minimum were very little extent=9.4, and the standard
29
Table 4- 11 the extent to which the type of Auditors report (qualified or unqualified) affect the quality of financial
reporting.
Valid Cumulative
extent
Medium 14 26.4 26.4 52.8
Large extent 12 22.6 22.6 75.5
Very large 13 24.5 24.5 100.0
extent
Total 53 100.0 100.0
Figor9 B4: The Histogram and the table show that the extent to which the type of Auditors report (qualified
or unqualified) affect the quality of financial reporting. The maximum rate were medium=26.4, and the
minimum were very little extent=11.3, and the standard division=1.315, and the mean=3.34 from the 53
sample size.
30
Table 4- 12 The extent to which the presence of information on corporate governance issues enhances the quality of
Valid Cumulative
extent
Little extent 10 18.9 18.9 26.4
Medium 15 28.3 28.3 54.7
Large extent 12 22.6 22.6 77.4
Very large 12 22.6 22.6 100.0
extent
Total 53 100.0 100.0
Figar10 B5: The Histogram and the table show that the extent to which the presence of information on
corporate governance issues enhances the quality of financial reporting. The maximum rate were
medium=28.3, and the minimum were very little extent=7.5, and the standard division=1.239, and the
mean=3.34 from the 53 sample size.
31
Table 4- 13 The extent to which the presence of information which explains the implications of the changes in
accounting policies enhances the quality of financial reporting.
Valid Cumulative
extent
Medium 21 39.6 39.6 58.5
Large extent 16 30.2 30.2 88.7
Very large 6 11.3 11.3 100.0
extent
Total 53 100.0 100.0
Figor11 C1: The Histogram and the table show that the extent to which the presence of information which
explains the implications of the changes in accounting policies enhances the quality of financial reporting.
The maximum rate were the medium=39.6, and the minimum were very little extent=7.5, and the standard
32
Table 4- 14 The extent to which the presence of information which explains the implications of the revision in
accounting estimates and judgment enhances the quality of financial reporting
Valid Cumulative
extent
Medium 17 32.1 32.1 52.8
Large extent 14 26.4 26.4 79.2
Very large 11 20.8 20.8 100.0
extent
Total 53 100.0 100.0
Figor12 C2: The Histogram and the table show that the extent to which the presence of information which
explains the implications of the revision in accounting estimates and judgment enhances the quality of
financial reporting. The maximum rate were medium=32.1, and the minimum were very little extent=5.7, and
the standard division=1.151, and the mean=3.42 from the 53 sample size.
33
Table 4- 15 The extent to which the adjustment of previous accounting periods figures, for the effect of the implication
of the change in accounting policy enhances the quality of financial reporting
Valid Cumulative
extent
Medium 11 20.8 20.8 41.5
Large extent 20 37.7 37.7 79.2
Very large 11 20.8 20.8 100.0
extent
Total 53 100.0 100.0
Figort13 C3: The Histogram and the table show that the extent to which the adjustment of previous
accounting periods figures, for the effect of the implication of the change in accounting policy enhances the
quality of financial reporting. The maximum rate were large extent=37.7, and the minimum were very little
extent=5.7, and the standard division= 1.154, and the mean=3.53 from the 53 sample size.
34
Table 4- 16 The extent to which the presence of comparative figures (current accounting periods figures compared
with the previous periods results) enhances the quality of financial reporting.
Valid Cumulative
extent
Medium 18 34.0 34.0 56.6
Large extent 11 20.8 20.8 77.4
Very large 12 22.6 22.6 100.0
extent
Total 53 100.0 100.0
Figor14 C4: The Histogram and the table show that the extent to which industry comparison enhances the
quality of financial reporting, the maximum rate were medium =34.0, and the minimum were very little
extent=7.5, and the standard division=1.288, and the mean=3.26 from the 53 sample size.
35
Table 4- 17 The extent to which industry comparison enhances the quality of financial reporting?
Valid Cumulative
extent
Medium 17 32.1 32.1 58.5
Large extent 10 18.9 18.9 77.4
Very large 12 22.6 22.6 100.0
extent
Total 53 100.0 100.0
Figor15 C5: The extent to which the inclusion of financial index numbers and ratios enhances the quality of
financial reporting, the maximum rate were very large extent=22.6, and the minimum were very little
extent=11.3, and the standard division=1.37, and the mean=3.32 from the 53 sample size.
36
Table 4- 18 The extent to which the inclusion of financial index numbers and ratios enhances the quality of financial
reporting?
Valid Cumulative
extent
Little extent 10 18.9 18.9 30.2
Medium 13 24.5 24.5 54.7
Large extent 9 17.0 17.0 71.7
Very large 15 28.3 28.3 100.0
extent
Total 53 100.0 100.0
Figor16 C6: The Histogram and the table show that the extent to which the inclusion of financial index
numbers and ratios enhances the quality of financial reporting, the maximum rate were very large
extent=28.2, and the minimum were very little extent=11.3, and the standard division=1.37, and the
37
Table 4- 19 The extent to which the clarity of financial statements, in terms of table of contents, headings, order of
components and summary enhances the quality of financial reporting.
Valid Cumulative
extent
Little extent 14 26.4 26.4 39.6
Medium 13 24.5 24.5 64.2
Large extent 9 17.0 17.0 81.1
Very large 10 18.9 18.9 100.0
extent
Total 53 100.0 100.0
Figor17 D1: The Histogram and the table show that the extent to the clarity of financial statement, in terms
of table of contents, headings, order of components and summary enhances the quality of financial reporting.
the maximum rate were little extent=26.4, and the minimum were very little extent=13.2, and the standard
38
Table 4- 20 The extent to which the disclosure of information in notes to the financial statements enhances the quality
of financial reporting
Valid Cumulative
extent
Little extent 14 26.4 26.4 30.2
Medium 15 28.3 28.3 58.5
Large extent 9 17.0 17.0 75.5
Very large 13 24.5 24.5 100.0
extent
Total 53 100.0 100.0
Figor18 D2: The Histogram and the table show that the extent to which that disclosure of information in
notes to the financial statements enhances the quality of financial reporting, the maximum rate were
medium=28.3, the were minimum were very little extent=3.8, and the standard division=1.221, and the
39
Table 4- 21 The extent to which the use of graphs and tables in the financial reports enhances the quality of financial
reporting.
Valid Cumulative
extent
Little extent 10 18.9 18.9 20.8
Medium 16 30.2 30.2 50.9
Large extent 10 18.9 18.9 69.8
Very large 16 30.2 30.2 100.0
extent
Total 53 100.0 100.0
.
Figor19 D3: The Histogram and the table show that the extent to which the use of graphs and tables in the
financial reports enhances the quality of financial reporting, the maximum rate were medium=30.2 and very
large extent=30.2, and the minimum were very little extent=1.9, and the standard division=1.169, and the
mean=3.57from the 53 sample size.
40
Table 4- 22 The extent to which the absence of jargons and technical terminologies enhances the understandability of
financial reporting, and thus its financial reporting quality.
Valid Cumulative
extent
Medium 17 32.1 32.1 47.2
Large extent 16 30.2 30.2 77.4
Very large 12 22.6 22.6 100.0
extent
Total 53 100.0 100.0
Figor20 D4= the extent to which the absence of jargons and technical terminologies enhances the
understandability of financial reporting, and thus its financial reporting quality, the maximum rate were
medium=32.1, and the minimum were very little extent=1.9, and the standard division=1.046, and the
mean=3.58 from the 53 simple size.
41
Table 4- 23 The extent to which the presence of detailed glossary of unfamiliar terms and abbreviations in the financial
statements enhances the quality of financial reporting.
Valid Cumulative
extent
Medium 13 24.5 24.5 43.4
Large extent 19 35.8 35.8 79.2
Very large 11 20.8 20.8 100.0
extent
Total 53 100.0 100.0
Figor21 D5: The histogram and the table show that the extent which the presence of detailed glossary of
unfamiliar terms and abbreviations in the financial statements enhances the quality of financial reporting, the
maximum rate were large extent=35.8, and the minimum were very little extent=3.8, and the standard
division=1.102, and mean=3.55 from the sample size.
42
Table 4- 24 The extent to which early signing of Auditor's report after the book-year end enhances the quality of
Valid Cumulative
extent
Little extent 11 20.8 20.8 28.3
Medium 10 18.9 18.9 47.2
Large extent 17 32.1 32.1 79.2
Very large 11 20.8 20.8 100.0
extent
Total 53 100.0 100.0
Figor22 E1: The histogram and the table show that T1. The extent to which early signing of Auditor’s report
after the book-year end enhances the quality of financial reporting, the maximum rate were large extent=32.1,
and the minimum were very little extent=7.5, and the standard division=1.244, and the mean=3.38 from the
53 sample size
43
Chapter Five:
5.1: Conclusion:
The aim of our study was to provide, the qualities of a comprehensive financial statement
based on financial standards, define a financial statement, and indicate the appropriateness of the
accounting information provided by the accounting units in the respective region. It also provided
qualitative characteristics of the accounting and the objectives of a financial statements. In effect, we
developed an empirical measurement to assess the yearly reports from the finance sectors. In line
with the IASB standards, the report the financial reporting mechanisms was developed using the
item index. Assessment of the report is important as it improved the decision making of a user by
providing important insights. This increases the market efficiency and reduces the cost of capital to
be invested by companies to achieve a desired goal. The reliability and validity of the measurement
tool heavily relied on the reference from previous empirical literature. Variables like firm size,
accounting standards, legality f the system, and reporting quality was kept in mind and consistency
maintained. This makes the analysis and measurements tools valid and the approaches credible. The
findings thus just served to support the idea and answer the research questions.
The comprehensive measurement tool that was constructed has some limitations that are
related to its reliability and validity. Consistent in the definition of the quality of the reporting of
finance, I.e the decision usefulness , the validity has to be established through the comparison
between measured results to the usefulness of the financial reporting which is perceived by the
stakeholders such as the lenders or equity providers. In addition, comparing the results of our
comprehensive measurement tool with the results of other quality assessment tools using the same
sample may increase insight into the validity and reliability of financial reporting quality assessment
tools. Conclusively, the reader has to know that the sample used I the study is relatively small. As
such, the researcher proposes that future studies, using bigger samples, can offer additional insights
into the external validity of the findings. Such insights may also aid in creating deeper knowledge on
the evaluation of the quality of financial reporting.
44
5.2: Recommendations:
It is recommended that a quality financial report should be subjected operationalization tests

for qualitative features. To make a measurement tools, previous literature that explicates on financial
reporting should be used. They determine quality and enhance qualitative characteristics underlying.
Also, a financial statement should maintain relevance. Relevance refers to as the ability “of
making a difference in the decisions made by users in their capacity as capital providers.” Basing on
previous works, relevance is operationalized by the use of four pieces citing to confirmatory and
predictive value.
Lastly, understandability should be enhanced in every report, this rises when the
classification, characterization, and presentation of information is clear and concise.
Understandability refers to when the quality of information allows users to grasp their meaning.
5.3: limitation
1. The solution of data analysis could be better was similar in all of banks of Erbil, But in Erbil all of
the banks were not much efficiency.
2. The researcher had some limitation regarding the required time to collect the data
3. The production and commercial environment of does not give lots of production chooses to
bankers for example: producing in financial sectaries revenue and bonds. Which is solution impact
the output of this research
45

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Contents

Approval page ................................................................................................ Error! Bookmark not defined.

MINIMUM WERE MUCH LIT ....................................................................................................... 23

REPORTING. ....................................................................... ERROR! BOOKMARK NOT DEFINED.

FINANCIAL REPORTING. ..................................................... ERROR! BOOKMARK NOT DEFINED.

THE QUALITY OF FINANCIAL REPORTING............................ ERROR! BOOKMARK NOT DEFINED.

REPORTING. ....................................................................... ERROR! BOOKMARK NOT DEFINED.

FIGURE 9 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION ON CORPORATE GOVERNANCE

FINANCIAL REPORTING. ..................................................... ERROR! BOOKMARK NOT DEFINED.

QUALITY OF FINANCIAL REPORTING................................... ERROR! BOOKMARK NOT DEFINED.

QUALITY OF FINANCIAL REPORTING................................... ERROR! BOOKMARK NOT DEFINED.

FIGURE 13 THE EXTENT TO WHICH THE PRESENCE OF COMPARATIVE FIGURES (CURRENT

THE QUALITY OF FINANCIAL REPORTING............................ ERROR! BOOKMARK NOT DEFINED.

FINANCIAL REPORTING. ..................................................... ERROR! BOOKMARK NOT DEFINED.

REPORTING QUALITY. ........................................................ ERROR! BOOKMARK NOT DEFINED.

REPORTING. ....................................................................... ERROR! BOOKMARK NOT DEFINED.

.......................................................................................... ERROR! BOOKMARK NOT DEFINED.

TABLE 4- 1 CASE PROCESSING SUMMARY ......................................................................................21

TABLE 4- 4 THE EXTENT TO WHICH THE INCLUSION OF NON-FINANCIAL INFORMATION, IN TERMS OF

.......................................................................................... ERROR! BOOKMARK NOT DEFINED.

REPORTING. ....................................................................... ERROR! BOOKMARK NOT DEFINED.

FINANCIAL REPORTING. ..................................................... ERROR! BOOKMARK NOT DEFINED.

REPORTING. ....................................................................... ERROR! BOOKMARK NOT DEFINED.

TABLE 4- 12 THE EXTENT TO WHICH THE PRESENCE OF INFORMATION ON CORPORATE GOVERNANCE

FINANCIAL REPORTING. ..................................................... ERROR! BOOKMARK NOT DEFINED.

QUALITY OF FINANCIAL REPORTING................................... ERROR! BOOKMARK NOT DEFINED.

TABLE 4- 15 THE EXTENT TO WHICH THE ADJUSTMENT OF PREVIOUS ACCOUNTING PERIODS

TABLE 4- 16 THE EXTENT TO WHICH THE PRESENCE OF COMPARATIVE FIGURES (CURRENT

THE QUALITY OF FINANCIAL REPORTING............................ ERROR! BOOKMARK NOT DEFINED.

TABLE 4- 17 THE EXTENT TO WHICH INDUSTRY COMPARISON ENHANCES THE QUALITY OF

FINANCIAL REPORTING. ..................................................... ERROR! BOOKMARK NOT DEFINED.

BOOKMARK NOT DEFINED.

REPORTING QUALITY. ........................................................ ERROR! BOOKMARK NOT DEFINED.

TABLE 4- 23 THE EXTENT TO WHICH THE PRESENCE OF DETAILED GLOSSARY OF UNFAMILIAR

FINANCIAL REPORTING. ..................................................... ERROR! BOOKMARK NOT DEFINED.

Key word: Oprationalizing the qualitative characteristics of financial reporting.

1.2 Research Objectives:

1.3 Importance of the research:

1.4 Research Question:

1.5 Research Variables:

The have five variables in this research:

2.1 Users of Accounting Information

External information users: Shareholders, directors, legal associates, lenders, customers,

Comparability: Another important qualitative characteristic is comparability. According to IASB

If a business infrastructure has value as an input to predictive methods used by shareholders to

1) Liberty from prejudice.

3) disqualified audit report

4) company policy statements. .

Understandability: According to ISAB (2008) first important qualitative characteristic is

2.3 The concept and objective of the financial statement:

Income statement: For a certain period of time the accomplishment of an organization is

Usefulness of the income statement

i. It helps to assess previous achievement of the entity. Organizations position in the

Usefulness of the statement of financial position (balance sheet):

3.1: Research Type:

3.2: Research Data

3.3 Data Collection:

Very Little Medium Large Very

Very little Little Mediu Large Very large

Very little Little Medium Large Very large

Very Little Medium Large Very

3.4.1 Descriptive analysis:

3.4.2 Frequency analysis: