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Framing Effects On New Generation Financial Statements.

Gönül, Mustafa Sinan
Muğan, Fatma Naciye Can
Akman, Nazlı
We will investigate the perceptions about the new format of the financial statements and evaluation of it by both expert and novice groups will also be gathered. This will provide a glimpse on how easy/difficult the adoption of this new standard will be when it will be forced into implementation. To investigate the effects of the aforementioned factors on the perceptions and judgments of the financial statement users, an experiment having a 2x2x4 factorial design will be employed. The independent variables will be i) the format of the financial statements (old or new), ii) the experience level of the group (experts or novices) and iii) the characteristic of the firm to which the financial statements belong (high-leverage, low- leverage, simple or complex). The first two factors represent the between-subjects variables, while the last factor will be manipulated as a within- subjects variable. Table 1 summarizes the experimental design and the procedure. The participants in the study will be composed of an expert group and a novice group in accordance with the design. The expert group will be composed of financial statement users working as auditors and experienced managers and will also include specialists from Sermaye Piyasası Kurulu (SPK). The experimental package will delivered to these experts via emails and their participations and contributions will be requested. After a certain time interval, second and third wave e-mail reminders about the study will be sent as needed. In this respect, our primary purpose for the current project is to investigate the effects of presenting a set of financial statements in the old format vs. the new format by making use of a controlled experiment so that a meticulous comparison for a number of different cases can be achieved. Another factor that will be involved in the experiment is the inclusion of either an expert or a novice group. Due to the fact that the experience level of experts and novices in dealing with the financial statements is quite different, the way they will be influenced by the change in the presentation format might be quite distinct as well.