A JUDGEMENTAL INTERNATIONAL CLASSIFICATION OF FINANCIAL REPORTING PRACTICES

TLDR

The paper surveys recent empirical international classifications of financial reporting practices. The study proposes a more detailed, precisely defined hypothetical classification of financial reporting practices. The authors select key measurement‑practice factors, score them transparently, and analyze the data using computer‑assisted clustering. The analysis confirms the proposed classification and aligns with, yet refines, earlier classifications.

Abstract

This paper briefly surveys some recent “empirical” international classifications. It suggests that their data contains errors and is not designed for classification, and that their methodology relies upon the doubtful data to generate hypotheses rather than to test them. This paper proposes a hypothetical classification which is more detailed and defines its universe more precisely than previous research. The testing selects factors deemed to represent fundamental aspects of difference in measurement practices, and scores these overtly and with explanation. Analysis is performed in several ways, including computer‐assisted clustering techniques. The results seem to confirm the hypothetical classification, and to be consistent with (but more detailed than) some earlier classifications.