Factors affecting financial reporting quality that are related with accounting culture

Financial information, which is processed in accounting, is presented to information users' utilization through financial reporting system. Users of financial information include various stakeholders and each of them has different expectations, motivations to utilize financial information. Qualified financial information aims to contribute to decision usefulness of information users. Financial reporting is acknowledged as high quality to the extent that its results and reported earnings accurately reflect underlying economic circumstances and enhance decisions of users of financial statements. Financial reports and its results are of high quality depending on their degree to reflect enterprises' performance accurately, determine enterprises' market value and their power to predict future performance. Methods used for measuring financial reporting quality ground on characteristics of qualified financial information, accounting based indicators (earnings quality approaches) and market based indicators. Accounting culture examines how accounting systems evolve by their development environments that generate inputs for financial reports. Accounting culture explains differences noted in accounting and financial reporting with the help of accounting values categorized in four dimensions. In this study, the effects of accounting culture on financial reporting quality are researched since accounting culture represents various conditions affecting accounting systems. Empirical research is conducted on enterprises listed in Borsa İstanbul manufacturing industry. Accounting based approaches are applied to measure financial reporting quality; features of accounting culture are concretized with empirical findings. Effects of accounting culture on financial reporting quality are found by employing survival analysis method and the relationship between financial reporting quality and accounting culture is revealed. An authentic approach for evaluating financial reports is provided to literature that internal and external stakeholders can consult.