Characteristics of Decision-Useful Financial Reporting Information: An Empirical Validation of the Proposed International Accounting Model

Poor quality information costs businesses trillions of dollars. Yet a foundational model influencing the quality of financial reporting information – the United States’ accounting model of information usefulness is still not empirically validated. In the near future this model is set to be incorporated into an international standard, globally affecting professional decisions about the characteristics of useful financial reporting information and thus its quality for a multitude of business users. Validated information quality models exist in Information Systems as potential substitutes, but these have not been fully reconciled with descriptive models of information usefulness in accounting. Using survey data from business information users as defined by the accounting standards, and partial least squares analyses, we empirically test and compare the proposed model for the international standard and a pre-existing empirically validated Information Quality model from Information Systems.