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The importance of brokerage house size in determining the utility of IFRS8 segment data to financial analysts

Lookup NU author(s): Ibrahim Al-Aamri, Professor Simon Hussain, Dr Chen SuORCiD

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).

Abstract

This paper reveals the important role played by brokerage house size in determining the utility of segment data to financial analysts. Brokerage house size is a proxy both for analysts’ access to company managers and for their access to in-house expertise. Using data for large UK firms, we reveal that the shift to International Financial Reporting Standard 8 (IFRS8) led to significant improvements in forecast accuracy for analysts in large brokerage houses but not for those in small brokerage houses. In addition, the forecasting ability of analysts in smaller brokerage houses was impaired when segments represented lines-of-business. No such effect was evident in the case of large brokers’ analysts. We link these findings to the improved insight which analysts in large brokers obtained from their superior access to managers and in-house support

Publication metadata

Author(s): Al-Aamri I, Hussain S, Su C, Hsu H

Publication type: Article

Publication status: Published

Journal: Journal of International Accounting, Auditing and Taxation

Year: 2022

Volume: 47

Print publication date: 01/06/2022

Online publication date: 20/05/2022

Acceptance date: 08/03/2022

Date deposited: 08/03/2022

ISSN (electronic): 1061-9518

Publisher: Elsevier

URL: https://doi.org/10.1016/j.intaccaudtax.2022.100472

DOI: 10.1016/j.intaccaudtax.2022.100472

ePrints DOI: 10.57711/r0hz-r430

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