Qualitative Characteristics of Financial Reporting and Non-Financial Business Performance

Abstract

The purpose of this article is to examine empirically, validate, and predict the reliability of the proposed relationship between the qualitative characteristics of financial reporting and non-financial business performance via the moderating role of the organizational demographic characteristics (type, size and experience). The article is based on primary data collected through a structured questionnaire from 239 out 328 of shareholdings companies in Jordan, and the single key respondents approach was employed. The quality of financial reporting was conceptualized by the IASB's framework fundamental qualitative characteristics (2008). The data were analyzed using structural equation modelling. The results showed that the magnitude and significance of the loading estimate indicate that the qualitative characteristics of financial reporting (i.e., relevance, understandability, faithful representation, comparability and timeliness) are significantly influence the non-financial business performance and the variation of relationship could be due to the demographic characteristics of the organizations (type, size, and experience). The article has important implications for accounting managers, auditors and financial practitioners and top managers in the surveyed companies and in similar organizations. The authors believe that the decision-makers of business organizations could benefit from this study's findings with a better understanding of the importance of the qualitative characteristics of financial reporting as well as their relationship with non-financial business performance.