ELEMENTS OF THE FRAMEWORK DEBATE THE NEEDS OF …

PRO-ACTIVE ACCOUNTING ACTIVITIES IN EUROPE (PAAinE)

ELEMENTS OF THE FRAMEWORK DEBATE

THE NEEDS OF USERS OF FINANCIAL INFORMATION

A USER SURVEY

MAY 2009

? The Conseil National de la Comptabilit? and EFRAG (2009)

This survey was carried out by the PAAinE Framework Project Team led by staff of the French standard setter (the Conseil National de la Comptabilit? (`CNC')). This report has been prepared by the same team. The work has been carried out as part of Europe's PAAinE initiative. The report is being issued by the CNC and EFRAG (the European Financial Reporting Advisory Group). It has been approved by the Co-ordinating Group of PAAinE, which at the time comprised representatives of the issuers and of the National Standard-Setters of The Netherlands, Poland, Spain, and Sweden, although those bodies do not express an opinion on the views expressed in the report. The report is available for downloading from the websites of the issuers.

About the PAAinE

EFRAG and the European National Standard Setters have agreed to pool some of their resources and work together more closely so that Europe as a whole can participate more effectively in the global accounting debate. It was agreed that this initiative should in the beginning concentrate on long-term pro-active work. The objective of the initiative is to stimulate debate on important items on the IASB agenda at an early stage in the standard-setting process before the IASB formally issues its proposals. The initiative has the joint ambitions of representing a European point of view and exercising greater influence on the standard-setting process. This initiative is known as the 'Proactive Accounting Activities in Europe' (or PAAinE) initiative.

Several projects have commenced under the PAAinE initiative, and this paper is the result of the PAAinE project that relates to the joint IASB/FASB project on the Conceptual Framework.

Work carried out under the PAAinE initiative can take a number of different forms and the full objectives of the initiative are:

? to stimulate, carry out and manage pro-active development activities designed to encourage the debate in Europe on accounting matters and to enhance the quality of the proactive input to the IASB;

? to co-ordinate and resource monitoring work of IASB and FASB projects; and

? to try to ensure, as far as is practicable, that the messages Europe gives the IASB are consistent.

A further description of the PAAinE initiative is available on the EFRAG website ().

The Needs of Users of Financial Information

SUMMARY OF CONTENTS

1

INTRODUCTION

2

PURPOSE OF THE SURVEY

3

SCOPE

4

METHODOLOGY

5

LIMITATIONS DISCLAIMER

6

SUMMARY OF RESULTS

APPENDICES

1

RESULTS OF THE SURVEY

2

USER SURVEY QUESTIONNAIRE

3

LIST OF COUNTRIES INCLUDED IN THE SURVEY

4

THE PAAINE PROJECT TEAM

Pages 1 1 2

2 - 4 4

4 - 10

11 ? 25 26 ? 32

33 34

1

The Needs of Users of Financial Information

INTRODUCTION

The PAAinE initiative on the conceptual framework

1.1 The Survey of the needs of users of financial information (User Survey) forms part of the European PAAinE initiative on the conceptual framework. It relates to the first phase of the IASB/FASB's (Joint Boards') Framework project, and in particular to the views expressed initially in the Joint Boards' discussion paper Preliminary Views on an improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics of Decision-useful Financial Reporting Information (issued in July 2006) and subsequently largely repeated in Exposure Draft of An improved Conceptual Framework for Financial Reporting: Chapter 1: The Objective of Financial Reporting & Chapter 2: Qualitative Characteristics and Constraints of Decisionuseful Financial Reporting Information (issued in May 2008).

1.2 The PAAinE project team's first discussion paper issued in October 2006 ("The conceptual framework: Starting from the right place?") identifies different key issues that, the PAAinE project team argues, have not been dealt with adequately in the first phase of the Joint Boards' project. One of the central issues identified by the PAAinE project team is that, although the identification of user needs is a pre-requisite to determining the objectives and qualitative characteristics of financial reporting, the first phase of the project is largely based on assumptions and unsupported assertions with respect to user needs. The issue was therefore taken onto the agenda of the PAAinE project on the conceptual framework.

1.3 At the end of 2006, in order to obtain information directly from user sources the PAAinE project team decided to carry out a survey in accordance with the methodology described in section 4.

PURPOSE OF THE SURVEY

2.1 The principal aim of the User Survey is to determine:

(a) how useful different forms of financial information are to users in their decision-making process;

(b) what improvements to financial information users require; and

(c) whether certain assumptions made by the Joint Boards were valid with respect to:

(i) the cash flow predictive objective of financial reporting; and

(ii) the stewardship objective of financial reporting.

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