IFRS Compliance, Disclosure And Relevance Of Financial Statements As Perceived By Investors With Regards To Their Decision Making

Abstract

The objective of financial statements as according to the Conceptual Framework is that financial statements are prepared so as to provide useful information for decision making to their users. However, there has been a growing dissatisfaction with financial statements and disclosures particularly shown by investors. The aim of this research is to investigate IFRS compliance, disclosure and relevance of financial statements as perceived by investors with regards to their decision making. The research focused on the case study of Lafarge Cement Zimbabwe. The methodology adopted was a mixed approach and a descriptive case study design was applied. A census of 15 major investors was used and questionnaires and interviews were used to capture the investor perceptions about financial reporting of Lafarge Cement Zimbabwe. Analysis of data was done using descriptive statistics and regression model so as to aid the understanding of the research findings. Conclusions and recommendations were drawn from the study. The research findings showed that investors still perceive financial statements to be useful and relevant in their decision making. Regression analysis showed a positive relationship between investor decision making and credibility of financial statements and also a positive relationship between investor decision making and quality of disclosures. There is need for companies to maintain credibility and reliability of financial statements and also ensuring quality disclosures so as to best provide investors with relevant information for decision making.