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| Author: | Simon, J. |
| Title: | Interpretation of probability expressions by financial directors and auditors of UK companies |
| Journal: | European Accounting Review
2002 : VOL 11:3, p. 601-630 |
| Index terms: | PROBABILITY FINANCIAL MANAGEMENT AUDITORS UNITED KINGDOM COMPANIES |
| Language: | eng |
| Abstract: | Probability expressions, such as 'remote', 'possible', 'probable' and 'virtually certain', have been used extensively in accounting. However, little is known about how these expressions are interpreted. It is important to understand how these expressions are interpreted by preparers of financial statements as significant inconsistencies will reduce the comparability between companies' financial statements. This paper reports the results of a survey of financial directors of large UK listed companies and UK auditors concerning the interpretation and the communication efficiency of thirty frequently used probability expressions. This paper fills two gaps in the literature. |
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