The usefulness of financial accounting information: Evidence from the field

Stefano Cascino, Mark A Clatworthy, Beatriz Garcia Osma, Joachim Gassen, Shahed Imam

Research output: Contribution to journalArticle (Academic Journal)peer-review


We examine how investment professionals assess the usefulness of financial accounting information depending on their information acquisition objectives and preparers’ earnings management incentives. We conduct a survey experiment based on face-to-face interviews with investment professionals and document two main results. First, we find that, compared with investment professionals assigned a firm valuation objective, those assigned a managerial performance evaluation objective assess accounting information as significantly less useful. Second, we find no systematic evidence that preparers’ earnings management incentives negatively affect investment professionals’ assessments of accounting information usefulness. To elucidate this second finding, we conduct a large-scale follow-up online experiment. Our results continue to offer no support for the effect of earnings management incentives on investment professionals’ assessments of accounting information usefulness, irrespective of preparers’ corporate governance quality. Instead, we find that poor corporate governance, by itself, reduces the usefulness of accounting information to investment professionals.
Original languageEnglish
Number of pages62
JournalThe Accounting Review
Publication statusPublished - 17 Feb 2021


  • Decision Usefulness
  • Financial Reporting Objectives
  • Earnings management
  • Corporate Governance
  • Investment Professionals
  • Relevance
  • Representational Faithfulness

Cite this