Abstract
In the present paper, the usefulness of Segmented Financial Reporting is evaluated by applying the statistical methods of Discriminant Analysis and Factor Analysis to a sample of large Greek Industrial Firms. The sample is composed of 73 firms, 53 of which prepare segmented financial statements for intra-firm purposes. The results of the analysis indicate that there exist three factors which discriminate, at a statistically significant level, the two groups of firms mentioned above. Furthermore, these factors are found to dominate the intensity of the differences between the two groups of firms. Mainly, the factors are summarised as follows: i) the efficiency in the estimation and prediction of a firm’s overall financial statements from segmented financial information, ii) the usefulness of segment reporting to the users of financial statements, iii) the ability of segmented financial statements in the prediction of main financial data for the firm as a whole. In conclusion, it is argued in the paper that the decision as to whether to report segmented financial statements depends heavily on the above mentioned factors which in turn, dominate the attitude of firms towards segment reporting.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Accounting Standards Committee, (1990), Statement of Standard Accounting Practice, No 25, (SSAP) Segmental Reporting, London.
Ashton, R. H., (1976), “Predictive Ability Criterion and User Prediction Models: A Reply”, The Accounting Review, July, pp. 680-682.
Balakrishnan, R. T., S. Harris & P. K. Sen, (1990), “The Predictive Ability of Geographic Segment Disclosures”, Journal of Accounting Research, Vol. 28, pp. 305–325.
Bradbury, M. E., (1992), “Voluntary Disclosure of Financial Segment Data: New Zealand Evidence”, Accounting and Finance, 32,1, pp. 15–26.
Calddwell, C. J., & R. W. Ingram, (1976), “Management Accountants Respond to Segment Reporting”, Management Accounting, Vol. 58, No 5, pp. 37–41.
Carmines, G. E., & R. A. Zeller, (1989), “Reliability and Validity Assessment”, Sage University Paper Series on Quantitative Applications in the Social Sciences, No. 17, Twelft Printing, California.
Collins, D. W. & R. R. Simonds, (1979), “SEC Line of Business Disclosure and Market Risk Adjustments”, Journal of Accounting Research, Vol. 17, No. 2, pp. 352–383.
Edwards, P. & R. Smith, (1996), “Competitive Disadvantage and Voluntary Disclosures: The Case of Segmental Reporting”, British Accounting Review”, 28, pp. 155–172.
Emmanuel, C. R. & S. J. Gray, (1978), “Presentation of Segments Reports”, Accountancy (UK), Vol. 89, No. 1018, pp. 91–92.
Emmanuel, C. & N. Garrod, (1992), Segmental Reporting: International Issues and Evidence, ICAEW — Prentice Hall.
Financial Accounting Standards Board (FASB), (1976), Statement of Financial Accounting Standards No. 14. “Financial Reporting for Segments of a Business Enterprise,” Stamford, FASB.
Garrod, N. W. & C. R. Emmanuel, (1988), “The Impact of Company Profile on the Predictive Ability of Disaggregated Data”, Journal of Business Finance and Accounting, Vol. 15, No. 2, pp. 135–154.
Hair, J. F., R. E. Anderson, R. L. Tatham & W. C. Black, (1992), “ Multivariate Data Analysis, with Readings”, Third Edition, Macmillan Publishing Company, New York.
Hussain, S. & L. C. L. Skerrat, (1992), “Gains from Desegregation and Definition of a Segment: A Note on SSAP 25”, Accounting and Business Research”, Vol. 22, No 88, pp. 370–376.
International Accounting Standards Committee, (1981), Reporting Financial Information by Segment, IAS 14, London, March.
Kochanek, R., (1974), “Segmental Financial Disclosure and Security Prices”, The Accounting Review, April, pp. 245-258.
Lott, R., (1996), “Reporting from the inside out”, Financial Executive, Vol. 12, No. 4, pp. 42–44.
Mak, Y. T., (1991), “Corporate Characteristics and the Voluntary disclosure of Forecast Information: A Study of New Zealand Prospectuses”, British Accounting Review, 23, pp. 305–3270.
McKinnon, J. L. & Dalimunthe, L. (1993), “Voluntary Disclosure of Segment Information by Australian Diversified Companies”, Accounting and Finance, 33,1, pp. 33–50.
Norusis, J. M., (1992), “SPSS for Windows, Professional Statistics”, SPSS Inc., Chicago, Illinois.
Papanastasiou, J., N. Dritsakis, & S. Warner, (1994), “On the value of the optimal tax rate”, Spoudai, Vol. 44, No. 3-4, pp. 107–113.
Peasnell. K. V., (1981), “Empirical Research in Financial Accounting”, in Browmwich, M. and A. Hopwood (eds), Essays in British Accounting Research, Pitman, London.
Rennie D. E., & C. R. Emmanuel, (1992), “Segmental Disclosure Practice: Thirteen Years On”, Accounting and Business Research, Vol. 22, No. 86, pp. 151–159.
Senteney L. D. & M. S. Bazaz, (1992), “The Impact of SFAS 14 Geographic Segment Disclosures on the Information Content of US-Based MNEs’ Earnings Releases”, The Internationaljournal of Accounting, Vol. 27, pp. 267–279.
Stice, K. E., (1991), “The Market Reaction to 10-K and 10-Q Filings and to Subsequent — The Wall Street Journal Earnings Announcements”, The Accounting Review, Vol. 66, No. 1, pp. 42–55.
Swaminathan, S., (1991), “The Impact of SEC Mandated Segment Data on Price Variability and Divergence of Beliefs”, The Accounting Review, Vol. 66, No. 1, pp. 23–41.
Zikmund, G. W., (1994), “Business Research Methods”, Fourth Edition, The Dryden Press, N.Y.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1997 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Spathis, C.T. (1997). Multivariate Analysis in Segment Reporting by Large Industry Firms in Greece. In: Zopounidis, C. (eds) New Operational Approaches for Financial Modelling. Contributions to Management Science. Physica, Heidelberg. https://doi.org/10.1007/978-3-642-59270-6_26
Download citation
DOI: https://doi.org/10.1007/978-3-642-59270-6_26
Publisher Name: Physica, Heidelberg
Print ISBN: 978-3-7908-1043-1
Online ISBN: 978-3-642-59270-6
eBook Packages: Springer Book Archive