The Rocket Science: Reading Financial Accounting Standards

Farrell, BJ; Farrell, HM; Wells, PA

The Rocket Science: Reading Financial Accounting Standards

Farrell, BJ Farrell, HM Wells, PA

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Publisher:: Irish Accounting and Finance Association
Publication Type:: Journal Article
Citation:: The Irish Accounting Review, 2010, 17 (2), pp. 41 - 63
Issue Date:: 2010-01

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Field	Value	Language
dc.contributor.author	Farrell, BJ	en_US
dc.contributor.author	Farrell, HM	en_US
dc.contributor.author	Wells, PA https://orcid.org/0000-0001-6822-4826	en_US
dc.date.issued	2010-01	en_US
dc.identifier.citation	The Irish Accounting Review, 2010, 17 (2), pp. 41 - 63	en_US
dc.identifier.issn	0791-9638	en_US
dc.identifier.uri	http://hdl.handle.net/10453/15805
dc.description.abstract	This paper identifies readability as a significant obstacle to the international harmonisation of financial accounting standards. In the study, the Flesch Reading Ease and the Flesch-Kincaid Grade Level tests are used to analyse the International Financial Reporting Standard on leases (using the Australian equivalent, AASB 117), the other international standards (using the remaining 46 AASB standards), and the US standard on leases, FAS 13. The results show the language of AASB 117 and FAS 13 exceeds the expected ability of many readers and represents an impediment to the interpretation of accounting standards. T-tests indicate that, on average, the Reading Ease and Grade Level scores of the other 46 AASB standards are significantly more demanding than even AASB 117. Consequently, the readability of the International Financial Reporting Standards ought to be comprehensively addressed by the International Accounting Standards Board to ensure the efficacy of efforts to harmonise accounting internationally.	en_US
dc.publisher	Irish Accounting and Finance Association	en_US
dc.relation.ispartof	The Irish Accounting Review	en_US
dc.title	The Rocket Science: Reading Financial Accounting Standards	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	17	en_US
utslib.for	150103 Financial Accounting	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
pubs.organisational-group	/University of Technology Sydney/Strength - CCG - Centre for Corporate Governance
utslib.copyright.status	closed_access
pubs.consider-herdc	true	en_US
pubs.issue	2	en_US
pubs.volume	17	en_US

Abstract:

This paper identifies readability as a significant obstacle to the international harmonisation of financial accounting standards. In the study, the Flesch Reading Ease and the Flesch-Kincaid Grade Level tests are used to analyse the International Financial Reporting Standard on leases (using the Australian equivalent, AASB 117), the other international standards (using the remaining 46 AASB standards), and the US standard on leases, FAS 13. The results show the language of AASB 117 and FAS 13 exceeds the expected ability of many readers and represents an impediment to the interpretation of accounting standards. T-tests indicate that, on average, the Reading Ease and Grade Level scores of the other 46 AASB standards are significantly more demanding than even AASB 117. Consequently, the readability of the International Financial Reporting Standards ought to be comprehensively addressed by the International Accounting Standards Board to ensure the efficacy of efforts to harmonise accounting internationally.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/15805