Abstract

This paper explores a seemingly incorrect perception among primary users of

accounting information that international accounting practices under IFRS

(International Financial Reporting Standards) are universally implemented in different

countries. Sell-side financial analysts at large investment banks are used as a proxy

for “primary users.” Data indicates that these sell-side financial analysts produce

investment recommendations for the largest institutional investment firms in the

world; making them the most likely to have significant impacts on equity markets.

Currently there is no research that examines the contemporary responsibilities of

financial analysts with relation to international accounting information in the post-

IFRS era. Prior research is used to demonstrate that differences in accounting

practices exist under IFRS despite the harmonization of accounting standards.

Therefore, even though it has been shown that differences in accounting practices

exist under IFRS, there is a perception among primary users of accounting

information that there are no such differences in practice because the accounting

standards are universally accepted.

The usefulness of accounting information in the role of financial analysts is also

further examined. The position of a London based sell-side analyst is subsequently

explored through two interviews and findings are transcribed. The results indicate

that there is no current literature detailing how primary users of accounting

information cope with international differences in the post- IFRS era, because there is

a perception among primary users that there are no differences in accounting practices

under IFRS. A secondary finding of significance indicates that financial analysts

rarely use audited annual reports and find little value in them.