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|Title: ||The Interpretation of Verbal Probability Expressions Used in the IAS/IFRS: The Auditors|
|Authors: ||Teixeira, Cláudia|
Fialho Silva, Ana
|Keywords: ||verbal probability expressions (VPE); IAS/IFRS; culture; auditors; comparability; Portugal.|
|Issue Date: ||12-May-2009|
|Citation: ||Teixeira, C. e Fialho, A. (2009): “The Interpretation of Verbal Probability Expressions Used in the IAS/IFRS: The Auditors Registered with the Portuguese Securities Market Commission”, 32º Congresso Anual da European Accounting Association (EAA), Maio, Tampere, Finlândia|
|Abstract: ||One of the main arguments in favour of the adoption and convergence with the international accounting
standards published by the IASB (i.e. IAS/IFRS) is that these will allow comparability of financial
reporting across countries. However, because these standards use verbal probability expressions (v.g.
“probable”) when establishing the recognition and disclosure criteria for accounting elements, they
require professional accountants to interpret and classify the probability of an outcome or event taking
into account those terms and expressions and to best decide in terms of financial reporting.
This paper reports part of a research we carried out on the interpretation of “in context” verbal probability
expressions used in the IAS/IFRS by the auditors registered with the Portuguese Securities Market
Commission, the Comissão do Mercado de Valores Mobiliários (CMVM). Our results provide support
for the hypothesis that culture affects the CMVM registered auditors’ interpretation of verbal probability
expressions through its influence on the accounting value (or attitude) of conservatism. Our results also
suggest that there are significant differences in their interpretation of the term “probable”, which is
consistent with literature in general. Since “probable” is the most frequent verbal probability expression
used in the IAS/IFRS, this may have a negative impact on financial statements comparability.|
|Appears in Collections:||CEFAGE - Comunicações - Em Congressos Científicos Internacionais|
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