IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

An Experimental Investigation of Vagueness on the Left Side of Balance Sheet

  • Ricardo Lopes Cardoso

    (Getulio Vargas Foundation)

  • André Carlos Busanelli de Aquino

    (University of São Paulo / FEA-RP)

Registered author(s):

    We investigated through experiments vagueness among property, plant, and equipment (PPE), intangible asset and inventory accounts. To semantic vagueness among items, epistemic vagueness is added in relation to liquidity order classification. Traditional dichotomy current/non-current classification of balance sheet items seems to have been used as a straitjacket, where inventories are current assets, and PPE and intangibles are non-current assets. While gray zone is ignored, items that lay on that are swept under the rug, i.e. arbitrarily classified in one way or another, hence, information asymmetry persists, and is neglected by auditors and standard setters. Literature suggests that the increase of information about underling economic transactions mitigate vagueness. Through the configurational approach, we identified five arrangements according to the intensity of property rights transference. Information about those five arrangements was provided to subjects. Evidences from between-subjects experiments (subjects were 93 MBA students enrolled on Accounting courses) suggest that the argued vagueness is acknowledge by financial statements users.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    File Function: Full text
    Download Restriction: no

    Article provided by Fucape Business School in its journal Brazilian Business Review.

    Volume (Year): 6 (2009)
    Issue (Month): 2 (May)
    Pages: 198-216

    in new window

    Handle: RePEc:bbz:fcpbbr:v:6:y:2009:i:2:p:198-216
    Contact details of provider: Postal: Fucape Business School Brazilian Business Review Av. Fernando Ferrari, 1358, Boa Vista CEP 29075-505 Vitória-ES
    Phone: +55 27 4009-4423
    Fax: +55 27 4009-4422
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:bbz:fcpbbr:v:6:y:2009:i:2:p:198-216. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sarah Lasso)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.