A post-implementation review of IFRS 15 A research report submitted by Brentin Govender Student number: 1832890 Ethical clearance number: SOA-2022-07-10 Cell: 0817054851 Email: brentingovender10@gmail.com In partial fulfilment of the requirements for the degree of A Master of Commerce (Accountancy) University of the Witwatersrand 2023 1 CONTENTS Acknowledgements .............................................................................................................................. 3 Abstract .................................................................................................................................................. 4 Section 1: Introduction ......................................................................................................................... 5 1.1. Revenue and IFRS 15 ......................................................................................................... 5 1.2. Statement of the problem .................................................................................................... 7 1.3. Purpose of the study ............................................................................................................ 7 1.4. The research questions ....................................................................................................... 8 1.5. Significance of the study ..................................................................................................... 8 1.6. Assumptions .......................................................................................................................... 9 1.7. Limitations and delimitations .............................................................................................. 9 Section 2: Literature review .............................................................................................................. 10 2.1. What is a post-implementation review? .............................................................................. 10 2.2. Improvements proposed by standard setters through the introduction of IFRS 15 ...... 11 2.3. Financial statement users and stakeholders ...................................................................... 13 2.4. Useful information and users of financial statements. ...................................................... 18 2.5. Academic research ................................................................................................................. 21 2.5.1. Empirical evidence from a South African and African context ..................................... 23 2.5.2. Empirical evidence from other jurisdictions ..................................................................... 24 2.6. Industries most impacted by IFRS 15 ................................................................................. 29 Section 3: Methodology ..................................................................................................................... 31 3.1. Research method selected ............................................................................................... 31 3.2. Population and sampling ................................................................................................... 31 3.3. Instrumentation ................................................................................................................... 32 3.4. Procedure and time frame ................................................................................................ 32 3.5. Summary and discussion of the sample group .............................................................. 34 3.6. Data analysis and interpretation ...................................................................................... 35 3.7. Reliability and validity of the study ................................................................................... 36 3.8. Ethical consideration .......................................................................................................... 37 Section 4: Results .............................................................................................................................. 38 4.1. Summary of findings .............................................................................................................. 38 4.2. Perceptions of respondent groups ....................................................................................... 39 4.3. Fundamental qualitative characteristics .............................................................................. 41 4.4. Enhancing qualitative characteristics .................................................................................. 44 2 4.5. Stewardship vs neoliberal agenda of revenue accounting ............................................... 50 4.6. Improvements proposed by the IASB .................................................................................. 52 4.7. Apparent drawbacks of IFRS 15 .......................................................................................... 57 4.8. The 5-step framework ............................................................................................................ 61 4.9. The objectives of IFRS 15 ..................................................................................................... 63 Section 5: Conclusion ........................................................................................................................ 64 5.1. Summary of findings and concluding remarks ................................................................... 64 5.2. Implications and contributions .............................................................................................. 67 5.3. Limitations and future research ............................................................................................ 68 Reference list ...................................................................................................................................... 69 Apppendix A: Descriptive statistics regarding the fundamental and enhancing qualitative characteristics of useful information ................................................................................................ 73 Appendix B: Full survey ..................................................................................................................... 74 3 ACKNOWLEDGEMENTS Everything that I have ever achieved is only through the grace and mercy of God Almighty. I would like to praise and thank God Almighty for granting me the ability and success in completing this study. Secondly, my parents, a simple thank-you and acknowledgement is insufficient for everything that you have done for me. Nevertheless, I would like to give thanks to the both of you for all the support, care and love you two have provided to me throughout my life. Your continued support gives me strength to continuously improve myself. Next, I would like to give thanks to both of my supervisors, Professor Wayne van Zijl and Professor Warren Maroun, for the continued guidance and support throughout my journey in completing, not just this study, but also my Master of Commerce (Accounting) degree. The both of you provided me with an exceptional support structure during the completion of this study. I would also like to mention and thank everyone who was involved in distributing this study’s survey to their networks and to everyone who actively sought out individuals that were able to provide input into the data of this study. In the same vein, I would like to thank all of the 109 CA(SA) individuals who took the time to complete and reply to the survey of this study. A special thanks also goes to Lelys Maddock, who reviewed this paper entirely. 4 ABSTRACT The purpose of this study is to explore the financial reporting implications of South Africa’s adoption of IFRS 15. This paper looks specifically at the usefulness of IFRS 15 in comparison with IAS 18, IAS 11 and its related interpretations from the perception of Chartered Accountants (SA) in South Africa. The research adopted a quantitative method using a survey. Primary data collected from 109 completed survey responses received from auditors, academics regulators, users of financial statements and preparers to evaluate whether IFRS 15 is more useful than the previous revenue standards. The findings suggest that the implementation of IFRS 15 has achieved the objectives set out by the IASB for issuing the new revenue standard. This has resulted in IFRS 15 providing more useful information than IAS 18 and IAS 11 as South African CA(SA)’s perceived IFRS 15 to improve the fundamental and enhancing qualitative characteristics of useful information. There are drawbacks to the implementation of IFRS 15 being high costs and the risk of incorrect application of IFRS 15. The findings also reveal that it is too complex to determine if IFRS 15 has reduced the opportunity for management bias or manipulation. This paper contributes to the accounting literature on the usefulness of new accounting standards from the perspective of Chartered Accountants (SA) in South Africa. 5 SECTION 1: INTRODUCTION 1.1. Revenue and IFRS 15 Revenue1 is one of the most important figures in a company’s financial statements (Coetsee et al., 2022; Dalkilic, 2014; IASB, 2008; Khamis, 2016; Napier & Stadler, 2020; Wagenhofer, 2014). This figure tells users about the absolute magnitude of the company; what types of activities it uses to earn income; and the company’s financial performance this year, over time and in comparison with competitors (Coetsee et al., 2022; Dalkilic, 2014; Napier & Stadler, 2020; Zhang, 2005). It is used to determine and compare competitors’ margins (efficiency) and is an indicator of the future growth and sustainability of a company (Khamis, 2016; Napier & Stadler, 2020; Zhang, 2005). The revenue figure is paramount for almost all decision making purposes (Peters, 2016) In May 2014, the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB), the two main global standard setters, jointly issued a new standard for the accounting treatment of revenue2. International Financial Reporting Standard (IFRS) 15-Revenue from Contracts with Customers was issued to replace International Accounting Standard (IAS) 18- Revenue, IAS 11-Construction Contracts and the related Interpretations of revenue recognition. These standards had been used for over 35 years (Napier & Stadler, 2020). IFRS 15 was effective from periods beginning on or after 1 January 2018 but the earlier application of the standard was permitted (IASB, 2014b). IAS 18 was the main standard which previously governed general revenue recognition, whereas IAS 11 was a revenue standard to be applied by companies in the construction industry. IAS 18 was issued in 1981 whereas IAS 11 was issued in 1979 with both standards being revised in 1993 (Napier & Stadler, 2020). Preceding revenue standards were becoming outdated for contemporary organisations that engage in complex transactions and contracts with customers (Carruthers, 1995; Coetsee et al., 2022; Dalkilic, 2014; IASB, 2008; Napier & Stadler, 2020; Veronica & Marian, 2016; Wagenhofer, 2014). Financial standards should be equipped with the necessary guidance to allow for the preparation of financial statements to 1 Revenue is defined as income the company receives from the customer by providing them with the output produced in the ordinary course of business (IASB, 2014b). 2 The IASB and FASB agreed to join forces and work together, through the Norwalk Agreement signed in 2002, to converge US. GAAP and IFRS accounting standards (Dalkilic, 2014; IASB, 2008, 2014a). 6 convey the true financial well-being of a company (IASB, 2019; Maroun, 2017; Murphy et al., 2013; Ravenscroft & Williams, 2009). There was a lack of guidance for complex revenue transactions which led to different accounting treatments for economically similar transactions (Coetsee et al., 2022; IASB, 2014b; Napier & Stadler, 2020). The different accounting treatments reduced the consistency and comparability of revenue information. It was difficult for investors and analysts to understand and compare different companies’ revenue figures (IASB, 2014b; Napier & Stadler, 2020). The deficient and ‘boilerplate’ presentation and disclosure requirements of the previous revenue standards were recognised by the IASB as being insufficient for investors and users to understand the revenue activities of an entity, as well as the judgement and estimates used when accounting for revenue (Napier & Stadler, 2020; Tong, 2014). The quality of accounting information being reported to users needed to be improved to meet the main objective of financial reporting in line with the Conceptual Framework, being useful information (IASB, 2008; Napier & Stadler, 2020). The lack of guidance led to creative accounting and earnings management3 which have plagued the accounting and financial profession (Altaji & Alokdeh, 2019; Napier & Stadler, 2020; Tutino et al., 2019). The two main standard setters, the FASB and IASB, wanted to converge revenue accounting globally (Carruthers, 1995; Coetsee et al., 2022; Coetsee & Wyk; Dalkilic, 2014; IASB, 2008; Napier & Stadler, 2020; Ogunode & Salawu; Peters, 2016; Veronica & Marian, 2016; Wagenhofer, 2014). Revenue recognition is one of the main driving forces of accounting and having a converged revenue standard can enhance the consistency and comparability of revenue across different industries and companies. This can help improve the effective functioning of international capital markets through the provision of enhanced useful information to capital providers in both international and local markets (IASB, 2008, 2014b; Napier & Stadler, 2020; Whittington, 2008; Zhang & Andrew, 2014). To achieve greater consistency and comparability and also provide more and better guidance to companies, jointly-developed revenue standards in the form of IFRS 15 (IASB) and ASC 606 (FASB) were developed and issued to replace all preceding revenue standards (Dalkilic, 2014; IASB, 2008, 2014a). It has been just over 5 years since IFRS 15’s adoption. As per the IASB’s due process, a post- implementation review (PIR) is required (Ewert & Wagenhofer, 2012; IASB, 2021a, 2021b). The purpose of the PIR is to assess the effect of the new requirements of an IFRS accounting 3 The term “earnings management” refers to management of an entity using accounting techniques to strengthen the appearance of the company's financial performance, financial position or both in order to deceive stakeholders (Tutino et al., 2019) 7 standard on investors, companies and auditors (IASB, 2021a, 2021b). This thesis conducts a survey to assess South African Chartered Accountants’ (CA(SA)) view of whether IFRS 15 results in more useful information to users than IAS 18, IAS 11 and its interpretations. In addition, the survey provides a question for any other comments or broad areas which participants wish to express in relation to the study, such as any unintended and/or intended consequences resulting from the implementation of IFRS 15. This information will be useful to the IASB during their formal PIR (IASB, 2021a, 2021b). 1.2. Statement of the problem Due to the importance of the revenue line item for users, a PIR of IFRS 15 is required (Ewert & Wagenhofer, 2012). The objective of the IASB when issuing IFRS 15 was to address deficiencies in previous standards and in this way, increase the usefulness of information provided by a revenue standard (Dalkilic, 2014; IASB, 2008, 2014a, 2014b; Napier & Stadler, 2020; Tong, 2014; Usurelu & Dutescu, 2018). The perceptions of users and other stakeholders who use IFRS standards and financial statements plays a significant role in determining whether this objective of the IASB has been achieved. To date, no research has dealt with this. In addition, the IASB has begun their PIR of the standard and may make any amendments as required. This thesis will be useful to the IASB’s PIR exercise as it will conduct a South African- specific PIR. 1.3. Purpose of the study This study explores the financial reporting implications of South Africa’s adoption of IFRS 15. The study aims to evaluate the usefulness of IFRS 15 in comparison to IAS 18, IAS 11 and its related interpretations from the perception of Chartered Accountants in South Africa (CA(SA)). The perceptions from different user groups of CA(SA)’s are also analysed and compared to evaluate if there is a difference in the perceived usefulness of IFRS 15 in comparison with IAS 18, IAS 11 and its related interpretations. The production of useful information by IFRS 15 is compared with that of IAS 18 and IAS 114. This thesis has an exploratory focus as the research study uses an interpretative epistemology and does not aim to produce an objective conclusion (Dimi et al., 2014). This study aims to be a base on which future qualitative and quantitative research can be developed regarding the usefulness of IFRS 15 by users of financial statements (Dimi et al., 2014). Future research 4 The reference to IAS 18 and IAS 11 in this study also includes all the related interpretations of the previous aforementioned revenue standards. 8 can evaluate the usefulness of IFRS 15 from different user perspectives and not only from holders of the CA(SA) designation. The absolute quantitative measure of the usefulness of IFRS 15 is deferred for future research. This study is aligned with the recommendation of Ewert and Wagenhofer (2012) and Moldovan (2014) in that it is conducted independently of the IASB. The findings will be submitted to the IASB for consideration as part of the IASB’s formal PIR process. 1.4. The research questions The thesis addresses the following research question: Does IFRS 15 result in the provision of more useful information to users of financial statements than IAS 18, IAS 11 and related interpretations? The research question is addressed by soliciting the views of experienced Chartered Accountants (as defined in Section 3) from the following respondent groups: • group 1: auditors, • group 2: academics, • group 3: preparers of financial statements, • group 4: regulators/standard-setters, and • group 5: users of financial statements Other biographical information is used to differentiate participants and to analyse the results collected from respondents (see Table 2 and Figure 1). 1.5. Significance of the study Many papers were published on the expected impact of IFRS 15 during the standards development. There are very few studies on the effects of applying IFRS 15 a few years after implementation (Boujelben & Kobbi-Fakhfakh, 2020; Coetsee et al., 2022; Napier & Stadler, 2020). No studies have been performed to evaluate the perceived impact of implementing IFRS 15 a few years after its implementation in a South African context. This study provides empirical evidence on the perceptions of South African Chartered Accountants on the impact of the implementation of IFRS 15. Prior literature (Altaji & Alokdeh, 2019; Boujelben & Kobbi-Fakhfakh, 2020; Coetsee et al., 2022; Jonick & Benson, 2018; Kabir & Su, 2022; Khamis, 2016; Maroun, 2017; Napier & Stadler, 2020) encourages further research on the impact of IFRS 15 a few years after implementation to determine the overall impact of IFRS 15 and whether IFRS 15 improves the 9 usefulness and quality of revenue reporting. This highlights the importance of evaluating the impact of IFRS 15 after its implementation. Ewert and Wagenhofer (2012, p. 289) found that academic research is useful for identifying and solving matters that are pertinent in a PIR and that the “communication gap” between academics and standard setters is least found in a PIR. In addition, the paper noted that academic research is also useful to PIRs because academic research is conducted to identify any potential challenges to new standards. Identifying potential challenges to new standards will aid standard setters in aiming to achieve the objective of accounting standards which is to improve information produced by financial reporting (IASB, 2019). The research conducted by Ewert and Wagenhofer (2012) highlights the importance of academic research on PIRs conducted by standard boards and how academic research can contribute to and influence contemporary accounting standards. This notion is supported by Louw and Maroun (2017) who also argue the supportive role academics play in advancing accounting through the contribution of knowledgeable research. Both Ewert and Wagenhofer (2012) and Louw and Maroun (2017) recommendations enhance the significance of the contribution of this study. 1.6. Assumptions Respondents completed the survey truthfully and without bias. The instrument has validity and measures the desired constructs of the research. It is assumed that all respondents are appropriately qualified. The survey dissemination information stated that only CA(SA)s should complete the survey and this was further confirmed via a mandatory question in the survey (refer to Section 3.7). 1.7. Limitations and delimitations The respondents of the study are all CA(SA)’s in South Africa, representing a geographical limitation. Responses from CA(SA)’s are not representative of the entire population of users of accounting standards and annual financial statements. There may be response bias by respondents as the survey used was designed to be brief so that respondents could complete the survey at a point in time to ensure an increased number of responses. IFRS 15 is the 10 newer revenue standard which may result in recency bias5 over IAS 18 and IAS 11 by respondents. Only IFRS 15 is dealt with as the study does not address the US equivalent of IFRS 15 (ASC 606). Only the perceptions of CA(SA)’s with prior working experience with IAS 18 were solicited to ensure that knowledgeable and informed responses were obtained (Dimi et al., 2014). This study is limited to the impact of IFRS 15 requirements as a whole and does not deal with individual technical requirements and principles of IFRS 15. SECTION 2: LITERATURE REVIEW This literature review is divided into six sections. The first section deals with what a post- implementation review is. The second section discusses the improvements proposed by standard setters through the introduction of IFRS 15. The third and fourth sections discuss the different user groups and useful information of financial statements respectively. The fifth section reviews previous academic literature on revenue recognition and the effects of the implementation of IFRS 15 in different jurisdictions. The sixth and last section discusses the industries which have been most impacted by the implementation of IFRS 15. 2.1. What is a post-implementation review? The IASB conducts a PIR of each new standard or major amendment of a standard after it has been implemented for at least 2 years. IFRS 15 has been in use for the past 5 years which gives the IASB the perfect opportunity to conduct a PIR of IFRS 15 (IASB, 2022). A PIR is an opportunity for the IASB to determine the effect a new standard and its requirements have had on users of the financial statements, preparers of financial statements, auditors, and regulators (Ewert & Wagenhofer, 2012; IASB, 2021a, 2021b). The specific aim of a PIR is for the IASB to assess the following: 1) whether the objectives of the standard-setting project have been met; 2) whether the information provided by the new standard is useful to users of financial statements; 3) whether the costs are as expected for preparing, auditing, enforcing, or using the requirements of the standard and 4) whether the standard can be applied consistently across entities and industries. 5 Recency bias is a cognitive and memory bias which favours recent events over historic ones. 11 The IASB publishes a request for information relevant to a post-implementation review to which anyone (the public) can respond. The board considers all comments from the public including the review of academic literature on the subject matter for evaluation in its own PIR (Ewert & Wagenhofer, 2012; Moldovan, 2014). A report and feedback statement are then published by the IASB summarising the findings and any further steps the board will take regarding its findings of the standard (IASB, 2021a). 2.2. Improvements proposed by standard setters through the introduction of IFRS 15 As stated in Section 1, The two main standard setters, the FASB and IASB, wanted to converge revenue accounting globally to address the deficiencies in the previous revenue standards through the development and implementation of IFRS 15 (IASB) and ASC 606 (FASB) (Boujelben & Kobbi-Fakhfakh, 2020; Dalkilic, 2014; IASB, 2014b; Khamis, 2016). The IASB had certain objectives it aimed to achieve and certain key improvements it hoped would be realised. Key improvements proposed by the standard-setter include (IASB, 2014a, 2014b): • providing a more robust framework for addressing revenue recognition issues, • improving comparability of revenue practices across entities, industries, jurisdictions and capital markets, • simplifying the preparation of financial statements by reducing the amount of guidance to which entities must refer and • requiring enhanced disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue. Much attention is placed on revenue accounting as the revenue financial statement line item is one of the most important figures in any set of annual financial statements for any organisation worldwide. Having converged global and local revenue accounting strengthens consistency and comparability of revenue across industries and companies and helps improve the effective functioning of international capital markets as better useful information is provided to capital providers in both international and local markets (IASB, 2008, 2014b; Khamis, 2016; Stainbank & Peebles, 2006; Whittington, 2008; Zhang & Andrew, 2014). The new revenue standard aimed to reduce the need to develop interpretative guidance for revenue recognition issues on a case-by-case basis as it is a single comprehensive framework for all entities to apply and provides more useful information through improved disclosure requirements (Boujelben & Kobbi-Fakhfakh, 2020; Coetsee et al., 2022; Coetsee & Wyk, 2020; IASB, 2014b; Ogunode & Salawu, 2021; Tong, 2014). 12 Included in the literature review will be questions which have been developed using prior literature and accounting standards. These questions were included in the research instrument (survey) of this study. IFRS 15 has been described as complex (Haggenmüller, 2019; Khamis, 2016; Veronica & Marian, 2016). This complexity should not detract from the recognition and measurement of simple revenue transactions provided by previous revenue standards (IASB, 2008; Khamis, 2016; Napier & Stadler, 2020; Peters, 2016; Tong, 2014). Q: Which standard (IFRS 15 or IAS18/IAS11) provides better guidance for the recognition and measurement of simple revenue transactions? One of the reasons for the introduction of IFRS 15 was to provide guidance on complex revenue transactions not provided by previous revenue standards (Coetsee et al., 2022; IASB, 2014b; Napier & Stadler, 2020; Peters, 2016). Q: Which standard provides better guidance for the recognition and measurement of complex revenue transactions? Management manipulation of revenue recognition because of insufficient guidance and disclosure of complex revenue transactions and activities was to be reduced by the introduction of IFRS 15 (Altaji & Alokdeh, 2019; IASB, 2019; Napier & Stadler, 2020; Tutino et al., 2019). Reduced management manipulation results in a fairer and more faithful accounting representation of revenue activities and transactions (IASB, 2019). Q: Which standard makes it more difficult for management to manipulate their accounting treatment of revenue? One of the key factors in assessing whether IFRS 15 has been successful will be determining whether IFRS 15 has reached its own objective and that of the standard-setting project (IASB, 2022). The objective of IFRS 15 must be met to ensure that IFRS 15 was introduced to address deficiencies in previous revenue standards and contribute to the provision of more useful information for users of the financial statements (IASB, 2014a). Q: To what extent do you believe IFRS 15 has achieved each of the following aspects of its objective: ▪ The principles of IFRS 15 result in useful information being reported to users about the: o Nature of revenue and cash flows? o Amount of revenue and cash flows? o Timing of revenue and cash flows? o Uncertainty of revenue and cash flows? 13 The revenue model in IFRS 15 was to provide a single and comprehensive framework which can be applied by different entities and different industries. The framework is applicable to all different types of transactions (Boujelben & Kobbi-Fakhfakh, 2020; Coetsee et al., 2022; IASB, 2014b; Ogunode & Salawu, 2021; Tong, 2014). The framework has been touted as “revolutionary” by Napier and Stadler (2020, p. 487) with similar backing from most prior research on IFRS 15 while Wagenhofer (2014) disputes the single revenue recognition framework. Q: Does IFRS 15’s 5-step process provide a single and comprehensive revenue framework that all companies are able to apply? 2.3. Financial statement users and stakeholders There are two broad types of accounting objectives preferred by users or preparers of financial statements, based on information needs and what is considered useful in financial statements (Beyer et al., 2010; Cascino et al., 2014; Murphy et al., 2013; Ravenscroft & Williams, 2009; van Zijl & Hewlett, 2022; Whittington, 2008). The stewardship objective originated from the need to hold someone accountable for a set of accounts (Hopwood, 1987). Murphy et al. (2013, p. 77) discuss that stewardship is still entrenched in contemporary accounting and is seen as the “living law” of accounting. Stewardship users are interested in the operations of a company, how management uses the capital of a company and how the company is being stewarded by an appointed agent (management) (Beyer et al., 2010; Cascino et al., 2014; Murphy et al., 2013; Whittington, 2008). Q: Which standard is better at portraying management's stewardship of company resources to generate revenue? The neoliberal user was created because of a shift in the root metaphor in accounting from accountability (stewardship) to decision-useful information because of the rise of neoliberalism that penetrated financial markets and, ultimately, accounting, after World War II (Murphy et al., 2013; Pandya et al., 2021; Ravenscroft & Williams, 2009). Neoliberal users want current, forward-looking and comparable information to enable them to make valuation and investment decisions about capital provisions to maximise their economic return. Current, forward-looking and comparable financial information can facilitate the prediction of future cashflows to compare investment decisions, value different companies and determine the riskiness of an investment (Beyer et al., 2010; Cascino et al., 2014; Ravenscroft & Williams, 2009; Stainbank & Peebles, 2006; Whittington, 2008; Zhang & Andrew, 2014). 14 Q: Which standard is better at providing the necessary information that can be used to estimate future revenue cashflows? Most contemporary users of financial statements can be a mix of stewardship and neoliberal users. There is often an overlap of information regarding stewardship and neoliberal needs, with some groups of users leaning towards one extreme or the other (Beyer et al., 2010; Cascino et al., 2014; Maroun & van Zijl, 2022; Wagenhofer, 2014). The introduction of IFRS 15 affected all users of financial statements, regardless of information needs (Wagenhofer, 2014). IFRS 15 influenced the revenue information disclosed in financial statements affecting the capital allocation decisions of neoliberal users (Coetsee et al., 2022; Napier & Stadler, 2020). More disclosures are required by IFRS 15 to provide users with an increased awareness of management use of company resources for stewardship users (Napier & Stadler, 2020; Wagenhofer, 2014). All user groups of financial statements should be considered when evaluating IFRS 15, in comparison to preceding revenue standards. The Conceptual Framework identifies primary financial statement users as current or potential capital providers, lenders, and other creditors (IASB, 2019). Capital providers, lenders and other creditors aim to make profits by making decisions to maximise returns through capital allocations. Different primary users use different information in annual financial statements to achieve this. Useful information must be reported to primary users for this purpose (Whittington, 2008; Zhang & Andrew, 2014). Q: Overall, which standard results in more useful information for capital providers? Q: Overall, which standard results in more useful information for lenders and creditors? For useful information to be reported in financial statements, the accounting standards upon which financial statements are prepared need to include adequate and appropriate guidelines (Carruthers, 1995; IASB, 2008, 2019; Louw & Maroun, 2017). Accounting standards have been and are continuously affected by different user groups because financial statements affect many different aspects of society, from capital markets to tax revenues collected by governments (Ball, 2016; Beyer et al., 2010; Watts & Zimmerman, 1978; Whittington, 2008). Each user group has different needs from financial statements based on different ideas about what is considered useful information (Stainbank & Peebles, 2006). Each user group influences the development and operationalisation of accounting standards based on the 15 needs of the said user group (Ball, 2016; Cooper & Robson, 2006; Watts & Zimmerman, 1978; Whittington, 2008). The different user groups and their needs are identified below: Preparers of financial statements: Preparers of financial statements are not conventional users of a set of financial statements as the responsibility of preparing company financial statements rests with management (Li, 2010). Management may also use competitors’ financial statements as a comparison tool in which case management can be considered both a user and preparer of financial statements (Ball; Cascino et al., 2014; Mardini et al., 2015). Cascino et al. (2014) notes that financial accounting information often plays a big role in internal decision-making in emerging economies and smaller entities. IFRS 15 could have had a greater impact on South African organisations than on organisations in an emerged economy. The perceptions of preparers of financial statements on the impact of IFRS 15 can determine if the standard has improved internal decision making on the revenue of organisations (Ball, 2016; Cascino et al., 2014; Hopwood, 1987; Napier & Stadler, 2020). Management has the practical application of accounting standards to prepare financial statements. Management has it in their interest to report information which shows improved financial performance as management is usually incentivised by shareholders to improve the financial health of a company (Cascino et al., 2014; Watts & Zimmerman, 1978). Management of companies wants to report information which is useful in reflecting their yearly performance as a steward of company resources. With revenue being an accounting figure that impacts heavily on the year-on-year financial performance of companies, management still is affected by the implementation of IFRS 15 (Watts & Zimmerman, 1978; Zhang & Andrew, 2014). Preparers of financial statement (management) are included in the population group of this research study because management is in a position to provide practical insights into the evaluation of the change in revenue standards. Academics: Academics 6 conduct research which provides empirical evidence regarding any new regulations, policies and standards introduced by governments or standard setters. The theoretical knowledge of academics in conjunction with the research done then helps standard-setters identify and introduce any potential improvements to or deficiencies in accounting standards (Ewert & Wagenhofer, 2012). 6 Academics work in the field of academia as a lecturer or researcher at a university or other higher education institution (Ewert & Wagenhofer, 2012). 16 Academics affect the operationalisation of the accounting craft by advancing it with research. (Louw & Maroun, 2017; Murphy et al., 2013; Ravenscroft & Williams, 2009). Academics are included in the population group of this study as they have a sound theoretical base of accounting standards to provide a knowledgeable perspective on the evaluation of the change in revenue standards (Ewert & Wagenhofer, 2012; Louw & Maroun). Auditors: Auditors are external and independent providers of assurance about an organisation’s financial statements (IAASB, 2009a). Through the application of professional judgement and professional scepticism and the use of financial statements and accounting standards, an audit opinion is derived about a company’s financial statements (IAASB, 2009a; Quadackers et al., 2009). Auditors do not use financial statements to hold management accountable or for investment/valuation decisions. Auditors ensure that management prepare annual financial statements in accordance with the relevant accounting standards. Debates between auditors and management often arise because of interpretations of the standards (Cascino et al., 2014; Ciesielski & Weirich, 2015). Opinions given by auditors are important enough to influence the decisions of all stakeholders of a company (Ball, 2016; Cascino et al., 2014; Li, 2010; Watts & Zimmerman, 1978). The assurance given on a set of financial statements impacts investors as investors, are capital providers and want comfort that the information upon which the investment/valuation decision is made, is assured by a professional independent party (Cascino et al., 2014; Watts & Zimmerman, 1978). The financial performance on which management is judged is assured by auditors. This assurance is important to both management and shareholders as shareholders gain comfort about management’s integrity (Ball; Cascino et al., 2014). Regulators also gain assurance in knowing that the financial figures upon which taxes and public decisions are based have been questioned and assured by an independent party (Kassem & Higson, 2016). Revenue is important for auditors during an audit (Khamis, 2016). As per International Standards on Auditing (ISA) 240, revenue is a figure in financial statements where there is an immediate rebuttal presumption that the risk of material misstatement is significant (IAASB, 2009b). Revenue usually forms part of the Key Audit Matters (KAMs) in an audit opinion indicating the significant amount of time and resources used to audit revenue (Napier & Stadler, 2020). IFRS 15 also requires management judgement to be made regarding the application of its provisions which requires disclosure as per IFRS 15 and necessitates assurance from auditors (Cascino et al., 2014; Coetsee et al., 2022; IAASB, 2009a). Auditors 17 have in-depth theoretical and practical knowledge of previous and current revenue standards coupled with knowledge about various company revenue-generating activities. Auditors are included in the population group of this research study because their insights provide both a theoretical and practical perspective into the evaluation of the change in revenue standards. Regulators/standard-setters: Governmental regulators in South Africa, such as the South African Revenue Service (SARS), focus on company financial statements for tax purposes. SARS prefers maximum company returns as it wants to maximise the tax revenues of the state and wants disclosure of all financial information representative of an organisation’s true profit on which tax will be applicable (Bengtsson, 2011; IASB, 2014b; Ravenscroft & Williams, 2009; Watts & Zimmerman, 1978; Zhang & Andrew, 2014). SARS holds management accountable for all required disclosures and any non-disclosures which result in tax evasion (Bengtsson, 2011). The increased level of revenue disclosure provided by IFRS 15, particularly the disaggregation of revenue, which previous revenue standards lacked will ensure this level of accountability (Ball; Coetsee et al., 2022). Regulators are included in the population group of this study because the perception of governmental regulators, in evaluating the change in revenue standards, can help understand if the increased revenue disclosures provided by IFRS 15 are beneficial to regulators (Ball; Coetsee et al., 2022; IASB, 2014b). The IASB as regulators of the accounting profession wants to maintain the integrity and creditability of the profession in the eye of the public (Louw & Maroun, 2017). The IASB consider different recommendations in accounting standards as these affect all users. Standard setters are included in population group of this research study as they must consider the different biases of each group of accountants when setting standards as this affects the interpretations and operationalisations of accounting standards (Khamis, 2016; Murphy et al., 2013; Whittington, 2008). The IASB has developed and implemented IFRS 15 (IASB, 2014a). Accountants from the IASB, although extremely knowledgeable in evaluating IFRS 15 in comparison with preceding revenue standards, may run the risk of being biased towards IFRS 15 (Ewert & Wagenhofer, 2012). The IASB has been excluded from the population group of this study. User groups: Capital providers have been combined under the user groups heading because of the many different forms of capital providers. Capital providers include equity investors, debt providers and trade creditors (Cascino et al., 2014; Wagenhofer; Zhang & Andrew, 2014). The primary 18 users have been identified as capital providers in the Conceptual Framework. The satisfaction of capital providers’ needs through the provision of decision-useful information for investment and valuation decision-making purposes warranted previous changes in the Conceptual Framework. The preferences and perceptions of capital providers have had a fundamental impact on accounting standard setters and standards (Khamis, 2016; Murphy et al., 2013; Whittington, 2008; Zhang & Andrew, 2014). The perceptions of capital providers will be appropriate in determining if IFRS 15 provides more useful information in comparison with previous revenue standards. The population group and research instrument used for this study include user groups which have historically influenced changes in accounting standards. Including the different identified groups in this study provides an appropriate mix of knowledgeable, theoretical and practical perceptions of the different stakeholder groups affected by the introduction and implementation of IFRS 15. 2.4. Useful information and users of financial statements. The main goal of financial reporting is to report useful information to users of financial statements (Barker & Schulte, 2017; IASB, 2019; Murphy et al., 2013; Ravenscroft & Williams, 2009; Stainbank & Peebles, 2006). The Conceptual Framework is the basis upon which all other standards are created to ensure that standards encapsulate appropriate requirements which produce high-quality useful information for users of financial statements (IASB, 2019; Murphy et al., 2013; Whittington, 2008). IFRS 15 should not be an exception. IFRS 15 purports to provide better quality of revenue information to better inform users’ decision making process. Information is useful when it complies with the fundamental characteristics of relevance and faithful representation. Information reported to users must be relevant and faithfully represent the underlying economics of what it purports to represent (Dimi et al., 2014; IASB, 2019). Enhancing qualitative characteristics of comparability, verifiability, timeliness, and understandability accompany the usefulness of information reported (IASB, 2019). Financial statements have been identified as a useful source of information for decision making purposes in a South African context by Dimi et al. (2014) and Stainbank and Peebles (2006). Dimi et al. (2014) suggested that financial statements should strive to show better links with the economic activity and strategy of a company. The research instrument used in this study is informed in part by the qualitative characteristics of the Conceptual Framework to draw on the perceived usefulness of IFRS 15 in comparison to IAS 18 and IAS 11 by informed groups of users (Altaji & Alokdeh, 2019; Dimi et al., 2014; IASB, 2014b). 19 Fundamental qualitative characteristics Relevance ensures that financial information reported has predictive or confirmatory value capable of making a difference in users’ decisions (IASB, 2019). The reporting of more relevant information on revenue by IFRS 15 will enable users better to predict the future growth of an organisation or to evaluate prior growth predictions made using current revenue generation reported (Altaji & Alokdeh, 2019; IASB, 2019). Accordingly, the following question is included in the research instrument. Q: Which standard is better at providing more relevant information regarding an entity’s revenue-generating activities? A faithful representation of revenue-generating activities will include information that is complete, neutral, and free from material error (IASB, 2019). As discussed in Section 2.2, IFRS 15 was introduced to improve the faithful representation of revenue information reported to users by addressing prior deficiencies in revenue standards which detracted from these (IASB, 2014b; Napier & Stadler, 2020). Enhanced disclosure requirements can provide a more complete picture of the revenue generation of an organisation (Coetsee et al., 2022). Increased guidance on complex revenue transactions reduces differing accounting treatments for similar economic transactions (Boujelben & Kobbi-Fakhfakh, 2020; IASB, 2014b; Napier & Stadler, 2020). IFRS 15 has more management judgement in applying its provisions, but the increased guidance reduces the opportunity for management bias or manipulation (Khamis, 2016; Napier & Stadler, 2020). Q: Which standard is better at providing a faithful representation of accounting information being reported to users of the financial statements? Other questions included in the research instrument which are relevant to evaluating the faithful representation of IFRS 15 in comparison with IAS 18 and IAS 11 have been included under Sections 2.2 and 2.5. Enhancing qualitative characteristics “Comparability” refers to the provision of similar information to enable users to compare and evaluate companies with one another (Barth, 2013; IASB, 2019). Comparability is essential for a variety of decision-making purposes by different user groups with the most noteworthy being the comparison of companies by capital providers for investment or valuation decisions (Barth, 2013). Comparability and consistency are two different concepts but are related. Comparability is a product of consistency (Barth, 2013). The introduction of IFRS 15 has reduced the inconsistency of revenue recognition for transactions which are similar in 20 economic nature. Improved revenue consistency among different firms, firms in different industries and among different industries was brought about by the comprehensive revenue model of IFRS 15 (Boujelben & Kobbi-Fakhfakh, 2020; Dalkilic, 2014; IASB, 2008, 2014a, 2014b; Napier & Stadler, 2020; Peters, 2016; Tong, 2014; Usurelu & Dutescu, 2018). The enhancement of consistency in revenue recognition was one of the main objectives when IFRS 15 was introduced by the IASB. Q: Which standard is better at enhancing the consistency in revenue recognition: ▪ Among firms in the same industries? ▪ Among different industries? ▪ Over time among firms in the same industry? The application of previous revenue standards resulted in a lack of comparability regarding complex revenue recognition because of a lack of guidance which IFRS 15 aimed to address. Consistent revenue recognition was sought by standard setters so that comparability of revenue information could be improved (Boujelben & Kobbi-Fakhfakh, 2020; Dalkilic, 2014; IASB, 2008, 2014a, 2014b; Napier & Stadler, 2020; Peters, 2016; Tong, 2014; Usurelu & Dutescu, 2018). Because of the interlink between the two concepts, two separate questions, but with the same sub-questions, regarding both consistency and comparability have been included in the research instrument (Barth, 2013; IASB, 2019). Q: Which standard is better at providing comparable information regarding revenue: • Among firms in the same industries? • Among different industries? • Over time among firms in the same industry? “Verifiability” provides users with the assurance that the financial information reported purports the economic phenomena it represents (IASB, 2019). Previous revenue standards lacked sufficient revenue disclosures to enable financial information which verifies an entity’s revenue-generating activities. Revenue amounts could not be traced back to sufficient revenue disclosures. The lack of guidance led to the opportunity for earnings manipulation which opposes verifiability (see Section 2.2). Q: Which standard is better at providing information that is verifiable regarding the accounting treatment of revenue? 21 “Timeliness” refers to the availability of financial information which is capable of influencing user decisions (IASB, 2019). Revenue is recognised under IFRS 15 on a transfer of control basis, whereas revenue is recognised under IAS 18 and IAS 11 on a transfer of risks and rewards of ownership basis (IASB, 2008). This difference affects the date (time) when revenue is recognised which can ultimately affect the revenue figure shown in a financial statement if the point at which the performance obligation of the transaction being satisfied is close to a company’s financial year-end. IFRS 15 has addressed some deficiencies in previous revenue standards by providing more guidance on the decision of when and if revenue can be recognised (Coetsee et al., 2022; Wagenhofer, 2014). Timeliness also enhances the relevance of information as more up-to-date and accurate financial information is more useful to capital providers and other user groups for decision-making purposes (Zhang, 2005). Q: Which standard is better at providing more timely information regarding an entity’s revenue activities? “Understandability” refers to classifying, characterising and presenting financial information clearly and concisely for users to follow and understand (IASB, 2019). The introduction of new or revised accounting standards which affect the recognition and measurement of an accounting issue can lead to better understandability of the accounting transaction and its treatment (Maroun, 2017; Napier & Stadler, 2020). The increased revenue disclosures required by IFRS 15 in comparison with previous revenue standards have resulted in a better understanding by users of an organisation’s revenue-generating activities (Coetsee et al., 2022). The 5-step model also provides a comprehensive guide to the revenue generating process of a company increasing the understandability of how and why revenue is treated in a particular way (Maroun, 2017). Q: Which standard is better at increasing the understandability of a company’s revenue-generating activities (business model)? 2.5. Academic research Despite having a limited body of research, studies on the effects of IFRS 15 have been conducted globally (Coetsee et al., 2022). Tong (2014) wrote one of the early research papers on the potential implications of the implementation of IFRS 15 on current practice. The paper predicted that IFRS 15 would result in ‘systematic and consistent’ revenue recognition, enhancing comparability between entities. This comparability would improve the usefulness of information reported by the revenue line item in financial statements to users of the financial statements. The paper predicted that entities with simple revenue activities would be minimally 22 affected, whereas entities with complex bundles of revenue offerings would be most affected because of the additional guidance given to complex transactions by IFRS 15 (IASB, 2008; Kabir & Su, 2022; Khamis, 2016; Napier & Stadler, 2020; Peters, 2016; Tong, 2014). This would result in the production of more useful information for users (IASB, 2014b). The prediction by Tong (2014) is shared by Usurelu and Dutescu (2018) who conclude that IFRS 15 should enhance the openness and strengthen international comparability of financial reporting between all entities and across a variety of different industries. Maroun (2017) conducted research which finds that the application of the requirements of IFRS 15, using a practical case study, enhances the usefulness of financial statements by better demonstrating the revenue-generating activities of an entity. Users can better understand how an entity creates value through the analysis of an entity’s business model. The value creation process is reflected in the amount and timing of revenue recognised by an entity which increases users’ understanding of the economic phenomena of an entity’s main purpose (Dimi et al., 2014). This aligns with both the objective of IFRS 15 and the Conceptual Framework for providing useful information to users (IASB, 2014a, 2019). A question on which standard, IFRS 15 or IAS 18 and IAS 11, better enables the understandability of a company’s revenue-generating activities has been included in the survey instrument as discussed above (see Section 2.4). Veronica and Marian (2016) conclude that the introduction of IFRS 15, even though more complex than were the previous revenue standards, is a convincing tool for reducing financial volatility by allowing for consistent revenue treatment among different industries and companies. This reduced financial volatility allows for enhanced comparability by users in capital markets (Ferreira, 2020; Tong, 2014; Usurelu & Dutescu, 2018; Zhang & Andrew, 2014). In contrast to most academic literature, Wagenhofer (2014, p. 349) takes the stance that the consistency which IFRS 15 aims to achieve is “undesirable” because the revenue-generating activities differ across firms and so does the usefulness of information that these firms report. In addition, the measurement of revenue in IFRS 15 is inconsistent with the Conceptual Framework as IFRS 15 contains several requirements of conservation whereas the Conceptual Framework favours neutrality over prudence, i.e., conservatism (IASB, 2019). Wagenhofer (2014) suggests that the trigger for the recognition of revenue should allow users to learn the most about the company’s performance. This led to the conclusion that a single revenue recognition principle would not be successful as each entity has different risks associated with its revenue (earnings) cycle and the single ‘transfer of ownership’ trigger of revenue recognition by IFRS 15 does not encompass the different risks. 23 2.5.1. Empirical evidence from a South African and African context Coetsee et al. (2022) conducted a study in a South African context regarding the decision usefulness of IFRS 15 disclosures by using a content analysis methodology of disclosures regarding revenue recognition of certain JSE-listed companies. The study found that disclosures made by entities were generally correct and compliant with IFRS 15 requirements which contributed to the improved usefulness of information reported to users. The reporting of disaggregated revenue into the different revenue streams further enhanced the quality of information reported to users and this subsequently contributed to the improvement in decision usefulness (Coetsee et al., 2022; Maroun, 2017; Napier & Stadler, 2020). However, the study did find inconsistency between IFRS revenue reporting and other non-IFRS reporting tools which detracted from decision usefulness to users. The study also found that some qualitative information disclosures by companies in the study could be improved to ensure compliance with the requirements of IFRS 15 to enhance decision usefulness (Boujelben & Kobbi- Fakhfakh, 2020; Dimi et al., 2014; IASB, 2014b; Maroun, 2017; Tong, 2014; Usurelu & Dutescu, 2018). This study supports the fact that the disclosure requirements of IFRS 15 enhance decision usefulness if fully complied with by organisations. Q: Which standard provides more helpful presentation and disclosures regarding the accounting treatment of revenue? Khamis (2016) conducted an empirical study on the perceptions of preparers and auditors on the level of familiarity, standard clarity, and ease of application of IFRS 15 across different business sectors in Egypt, a developing country like South Africa. The study used a survey to gather data from 31 auditors and 34 preparers from local firms and listed companies which operated in different sectors within Egypt. The study found that during the implementation phase of IFRS 15, the preparers and auditors sampled did not yet have a consistent and thorough understanding of IFRS 15 as they were unfamiliar with the standard (Chand et al., 2010). The sampled group believed that the concept of IFRS15 was not clear and that the standard was also difficult to apply across different business sectors in Egypt (Chand et al.; Haggenmüller, 2019; Wagenhofer, 2014). The findings of Khamis (2016) are linked with observations made by Chand et al. (2010) that the application and interpretation of accounting standards are subject to the complexity of, and familiarity with, an accounting standard. A recent study conducted by Aladwey and Diab (2023), also in Egypt, on the early adoption impact of IFRS 15 found that firm characteristics had a significant impact on the decision to adopt IFRS 15 early and that there were benefits to the early adoption of IFRS 15. These benefits include the increased economic value of profitability, enhanced disclosures and 24 improved quality of annual reports (Altaji & Alokdeh, 2019; Boujelben & Kobbi-Fakhfakh, 2020; Coetsee et al., 2022; Napier & Stadler, 2020; Ogunode & Salawu, 2021). These benefits can boost the confidence of stakeholders of financial statements and so improve decision-making (Coetsee et al., 2022; Napier & Stadler, 2020). The study encourages the faster adoption of newer IFRS standards, especially IFRS 15, in developing markets. In another African context, Ogunode and Salawu (2021) conducted a study regarding the implementation of IFRS 15 in Nigeria using a descriptive research design by extracting data from Nigerian-listed companies. The study found that the implementation of IFRS 15 had a positive effect on the accounting numbers of the firms listed in Nigeria which contradicts the findings of Napier and Stadler (2020). The study did not reflect the impact of IFRS 15 on decision usefulness. The study was in line with the recommendations of Ewert and Wagenhofer (2012) on the evaluation of standards on the effect of earnings quality. The proper identification and treatment of royalties, income taxes, the appropriate portrayal of revenues from contractual fees, the need for constant contract modifications, capitalization of contract costs and collectability issues were recognised as important hurdles in the study regarding the implementation of IFRS 15 and its requirements. It is unclear if these factors impeded the usefulness of information being reported to users. 2.5.2. Empirical evidence from other jurisdictions Empirical evidence from Europe Napier and Stadler (2020) study the practical effects of the implementation of IFRS 15 on the financial performance of listed companies in a European context. Empirical evidence was obtained from annual reports of forty-eight STOXX Europe 50 companies, comment letters submitted by these STOXX 50 companies and the conduction of 3 separate interviews with a preparer of financial statements, an advisor and an auditor. The study confirmed that IFRS 15 did not have a significant impact on the revenue recognition and measurement for most companies but did significantly impact industries with complex offerings to customers, such as the telecommunications industry. The introduction of IFRS 15 has led to businesses, particularly businesses with complex bundles of offerings to customers, aligning their operations with the requirements of IFRS 15 (Coetsee et al., 2022; Tong, 2014; Usurelu & Dutescu, 2018). The alignment of operations to IFRS 15 requirements adds to users’ understanding of these companies’ revenue-generating activities through revenue disclosures in the financial statements (Coetsee et al., 2022; Maroun, 2017). 25 Napier and Stadler (2020) note that the introduction of a new standard impacts the costs associated with compliance with that standard. The increased disclosure requirements, disaggregation of revenue reporting and 5-step model mean that increased costs were incurred by entities to implement and continuously adhere to the requirements of IFRS 15 (Coetsee et al., 2022; Napier & Stadler, 2020). One of the objectives of the IASB (see Section 2.1) when conducting its own PIR is to determine whether the costs are expected when utilising a new standard and are not too strenuous on companies (IASB, 2014b). Q: Which standard results in the greater costs to gather, process and report revenue activities for the following broad cost categories: • IT systems • Administration • Daily processing • Staff • Overall, which standard results in more costs to gather, process and report revenue transactions? Napier and Stadler (2020) also discuss that the management of an entity can influence earnings to achieve its desired objective (Beyer et al., 2010; Watts & Zimmerman, 1978). Revenue is the figure in financial statements which is most vulnerable to earnings management given its significance to users and that it is usually used to determine management bonuses (Tutino et al., 2019). Beyer et al. (2010) highlight the fact that there is voluntary disclosure of information in financial statements because of management incentives. This exacerbates the information asymmetry between management and other users of financial statements. Voluntary disclosures can contribute to earnings management through non-disclosure of financial information. The introduction of IFRS 15 has reduced the ability of management to make use of voluntary revenue disclosures and to engage in earnings management (IASB, 2014b; Napier & Stadler, 2020). More explicit guidance given in IFRS 15 leaves less room for management judgement regarding revenue disclosures and complex revenue transactions compared to previous revenue standards. Required information disclosures for revenue reduce the opportunity for voluntary disclosures and provide a consistent and comparable base upon which to compare company revenue disclosures, reducing the risk of covering earnings management (Coetsee et al., 2022; Napier & Stadler, 2020). The reduction in the potential occurrence of earnings management leads to a fairer and more reliable presentation of revenue (Altaji & Alokdeh, 2019; Beyer et al., 2010; Coetsee et al., 2022; IASB, 2014b; Napier & Stadler, 2020). Tutino et al. (2019) support this as evidence is provided that IFRS 15 should reduce earnings management in industries more prone to 26 earnings management, such as the telecommunications industry. This is also partly because of the additional guidance given by IFRS 15 on complex revenue transactions and contracts (IASB, 2014b; Napier & Stadler, 2020). The fairer presentation of revenue for companies enhances the useful information being presented to users and can also reduce the number of corporate and accounting scandals that have plagued the accounting profession in the past. This may have been an indirect objective of the IASB and FASB in developing a converged revenue standard (Ravenscroft & Williams, 2009; Zhang & Andrew, 2014). On the contrary, Haggenmüller (2019) notes that IFRS 15 may not have a material impact on earnings management and creative accounting as IFRS 15 still leaves room for judgement to be made by management (Khamis, 2016). Haggenmüller (2019) conducted a study regarding the challenges arising from the implementation of IFRS 15 in a German context. The study was conducted through 15 interviews with German auditors and accountants and a qualitative analysis of 30 German- listed companies. Contrary to the Napier and Stadler (2020) study, the Haggenmüller (2019) study found that IFRS 15 also affected companies with simple business offerings and that the implementation of IFRS 15 is complex without leading to much change. The study concluded that the objectives of the IASB in issuing IFRS 15 are questionable from a practical outlook. The conclusions made by the study supports the pre-emptive stand that Wagenhofer (2014) took on the implementation of IFRS 15. A study conducted by Boujelben and Kobbi-Fakhfakh (2020) from a European perspective using a content analysis of the IFRS 15 disclosure requirements of 22 companies’ annual reports. The study found that the implementation of IFRS 15 affects the disclosures of entities in different sectors to a different extent. The specification of contracts with customers in different sectors will impact the revenue disclosures differently. It notes that industries with complex contracts with customers, such as the telecommunications industry, require increased disclosure to correctly reflect the revenue-generating activities to contribute to the decision usefulness that IFRS 15 aims to achieve which is aligned to the findings of Coetsee et al. (2022) in a South African context (Napier & Stadler, 2020; Tong, 2014). Peters (2016) conducted a case study on an Aerospace Belgium company and supplemented the case study with a survey sent to different Belgium companies. 18 responses were received from the survey conducted. The study found that respondents perceptions of IFRS 15 were negative because of the unfamiliarity with the new revenue standard which was deemed to be too complex (Chand et al., 2010; Khamis, 2016). The case study and respondent perceptions found that the implementation of IFRS 15 required considerable effort with insignificant changes in revenue recognition for simple revenue transactions (Haggenmüller, 2019). 27 Industries with complex offerings and transactions are affected by IFRS 15. Overall, perceptions were that a new and comprehensive revenue standard, in the form of IFRS 15, was needed to unify global business and revenue practices (Carruthers, 1995; Coetsee et al., 2022; Coetsee & Wyk; Dalkilic, 2014; IASB, 2008; Napier & Stadler, 2020; Ogunode & Salawu; Peters, 2016; Veronica & Marian, 2016; Wagenhofer, 2014). IFRS 15 better reflects the true economic substance of transactions rather than the mere form of transactions (Dimi et al., 2014; Maroun, 2017). In addition, the study found that implementing IFRS 15 was “more than a simple accounting change” as IT systems of businesses are highly impacted to account for revenue transactions in compliance with IFRS 15 (Napier & Stadler, 2020, p. 64). Empirical evidence from North and South America Dutta and Zhang (2002) confirmed that there is a conflict with the agency theory based on the early recognition of revenue using market valuation principles (relevance). The study conducted found that conservatism in accounting is a desirable feature because management has an incentive to present an image which does not reflect the reality of an entity through creative accounting and earnings management (Georgiou & Jack, 2011; Napier & Stadler, 2020; Watts & Zimmerman, 1978). The paper concludes with the recommendation of conservative accounting in revenue recognition which is evident in IFRS 15 and can enhance the faithful representation of accounting information (Napier & Stadler, 2020; Wagenhofer, 2014; Zhang, 2005). Zhang (2005) conducted a study on the early recognition of revenue in the software industry using a sample of United States of America (USA)-based software firms. The study found that early recognition is more relevant to users but resulted in less reliability in the revenue line item in financial statements (Whittington, 2008). Early revenue recognition leads to uncertainty in revenue. The reduced reliability in revenue detracts from the useful information reported to users despite the relevance attached thereto. IFRS 15 departs from previous early recognition practice which was not prohibited in previous revenue standards (Altaji & Alokdeh, 2019; Coetsee et al., 2022; Jonick & Benson, 2018; Napier & Stadler, 2020; Veronica & Marian, 2016). The Zhang (2005) study supports the notion held by Maroun (2017), Napier and Stadler (2020), Ogunode and Salawu (2021) and Ferreira (2020) that revenue reported by companies in compliance with IFRS 15 results in the enhancement of reliability and faithful representation through increased disclosures, understandability and honest revenue recognition principles. Ferreira (2020) examines the effects of the implementation of the US equivalent of IFRS 15 on capital markets. The study found that the new revenue standard increased both the correctness of the true economic reality and the comparability of the information reported to 28 users. This led to an increase in the liquidity of companies and capital markets (IASB, 2014b; Usurelu & Dutescu, 2018; Veronica & Marian, 2016). In another USA study, Jonick and Benson (2018) conducted a study on a small sample of Fortune 500 companies on how the US equivalent of IFRS 15 is expected to affect the operations of these companies. The study found that the US equivalent of IFRS 15 was expected to change internal policies and procedures but would not influence the sampled companies’ goods and services offerings to customers. This conclusion has been shared by the Napier and Stadler (2020) study. Empirical evidence from the Middle East, Asia, and Oceania (Australia and New Zealand) Altaji and Alokdeh (2019) conducted a study in a Middle Eastern country using a survey which was distributed to the big four audit companies in Jordan. The study had a response rate of 68% which found that there is a statistically significant impact on the enhancement of relevance and decision usefulness of accounting information included in financial statements because of the implementation of IFRS 15. Additionally, Altaji and Alokdeh (2019) found that the implementation of IFRS 15 had a statistically important impact in enhancing the quality of financial reporting information reported to users from the perspective of the external auditors in Jordan. The study provides evidence that information produced by using the requirements of IFRS 15 does meet the objective of IFRS 15 by providing useful information which is relevant and faithfully purports the economic phenomena of an entity’s revenue-generating activities (Boujelben & Kobbi-Fakhfakh, 2020; Coetsee et al., 2022; Maroun, 2017). An early study conducted in Malaysia by Lim et al. (2015) to capture auditors and accountants perceptions using a survey on the clarity of the concept of control in IFRS 15 and the ease of application of IFRS 15 across different industries. Similar to the views held by Wagenhofer (2014), the study found that the respondents anticipated issues which would be encountered from a practical perspective because of the single framework that is meant to be applicable to different entities and industries which have different business models. The single framework can lead to comparability problems as the standard may not be easily applied to different business industries and sectors. The study also recommended increased provision of education and awareness to accountants and auditors by standard setters in an attempt to improve the comparability results of IFRS 15. Kabir and Su (2022) conducted a recent study on the effect of IFRS 15 on revenue recognition practices and the financial statements of firms in Australia and New Zealand. The findings suggest that IFRS 15 has not had an impact on simple result transactions (Napier & Stadler, 2020; Peters, 2016), but the standard has resulted in the deferral of revenue recognition for 29 those firms which have been impacted by the standard (Onie et al., 2022). This is because of the transfer of the recognition of revenue from the ‘risks and rewards principles’ to the to the ‘transfer of control principles’ as indicated by Wagenhofer (2014) and IASB (2008). The implementation of IFRS 15 has also impacted various other financial statements line items and different business segments such as implementation costs. Another recent study conducted by Onie et al. (2022) in Australia found little evidence that IFRS 15 generally improved the relevance of earnings which goes against the findings of Altaji and Alokdeh (2019), Napier and Stadler (2020) and Ogunode and Salawu (2021) and predictions of other prior literature. 2.6. Industries most impacted by IFRS 15 Industries and companies which are most affected by the implementation of IFRS 15 are those which have a complex bundle of offerings to customers (Boujelben & Kobbi-Fakhfakh, 2020; IASB, 2014b; Tong, 2014; Usurelu & Dutescu, 2018). Industries and businesses that provide simple offerings to their customers have not been much impacted by the implementation of IFRS 15 (IASB, 2008; Kabir & Su, 2022; Khamis, 2016; Napier & Stadler, 2020; Peters, 2016; Tong, 2014). The affected industries or sectors most affected by the requirements of IFRS 15 are the telecommunications industry, the technology sector, the healthcare sector, construction and engineering, consulting services, educational service providers, real estate and entities that manufacture custom goods (Boujelben & Kobbi-Fakhfakh, 2020; Ciesielski & Weirich, 2015; Coetsee et al., 2022; Coetsee & Wyk, 2020; Hepp, 2018; Khamis, 2016; Maroun, 2017; Napier & Stadler, 2020). Ciesielski and Weirich (2015) predicted that financial institutions will not be significantly affected by IFRS 15 as financial instruments are governed by its standard of IFRS 9- Financial Instruments. Financial institutions employ other enterprises to generate alternate income, such as the disposal of houses and cars which have been repossessed by banks. These other enterprises will be affected by the requirements of IFRS 15. As industries have been differently impacted by IFRS 15, an industry-specific question was included in the biographical section of the research instrument to gauge how participants from different industries perceive the usefulness of the new revenue standard in comparison with previous revenue standards. The usefulness of IFRS 15 can be compared across industries and can provide insights into whether there is consistency in the perceived usefulness of IFRS 15 (Boujelben & Kobbi-Fakhfakh, 2020; IASB, 2008, 2014b). 30 Table 1: Summary of the effects of the implementation of IFRS 15 (ASC 606 for North America) on the different jurisdictions using empirical evidence7 The following key is used: • Agree with indicator (A) • Conflicting and/or mixed evidence (Neutral) • Disagree with indicator (D) • No empirical evidence (-) 7 Table 1 has been constructed using prior academic literature which has been explored in Section 2. The indicators in Table 1 represent a summary of the key factors or elements of revenue or useful information that have or will be impacted by the introduction of IFRS 15. These indicators have also formed the basis for the preparation of the survey used in the study as noted in Section 3.3. Indicator South Africa Rest of Africa North and South America Europe Middle East Asia/ Oceania 1. IFRS 15 has positively (agree) or negatively (disagree) impacted the revenue figure reported - ✓ -  -  2. Compliance with increased presentation and disclosure requirements in IFRS 15 ✓ - ✓ ✓ ✓ ✓ 3. IFRS 15 has resulted in more useful information being produced in annual financial statements ✓ - ✓ ✓ ✓ - 4. IFRS 15 has reduced the opportunity for earnings management - - ✓ ✓ - - 5. IFRS 15 has affected companies with complex revenue transactions/offerings ✓ ✓  ✓ ✓ ✓ 6. IFRS 15 has affected companies with simple revenue transactions/offerings - ✓  Neutral -  7. 5-step framework is applicable to all business industries/sectors - ✓ - ✓ -  8. The overall costs of implementing IFRS 15 are burdensome - - - ✓ - ✓ 9. The systems and processes to continuously apply IFRS 15 are burdensome/ strenuous - - - ✓ - ✓ 31 SECTION 3: METHODOLOGY 3.1. Research method selected The purpose of this study is to explore the financial reporting implications of South Africa’s adoption of IFRS 15. A survey was used to collect the perceptions of CA(SA)’s on the usefulness of information provided by using IFRS 15 in comparison to using IAS 18, IAS 11 and its related interpretations. (Couper, 2017; Kelley et al., 2003). A survey is an appropriate instrument to conduct the research of the study and to collect the appropriate data (Bloomfield et al., 2016). Surveys produce descriptive data about field practitioners’ views and preferences. The views and preferences extracted by a survey instrument are used to test theories, promote theory building, and/or allow for exploratory analysis (Bloomfield et al., 2016). Although a quantitative method was used, this research is inspired by an interpretative epistemology. This research does not aim to quantify the usefulness of IFRS 15 but to explore the perceived usefulness of IFRS 15 in comparison with IAS 18, IAS 11 and its related interpretations. 3.2. Population and sampling The survey was distributed to experienced Chartered Accountants based in South Africa. CA(SA)’s have expert knowledge of and experience with IFRS and can provide the insights necessary to this study (Couper, 2017). To be able to compare appropriately IFRS 15 to IAS 18, IAS 11 and its related interpretations, only CA(SA)’s with prior working experience with IAS 18 were considered. Generally, respondents were not purposefully selected. This study allowed any CA(SA) with prior working experience in IAS 18 to participate in the survey. A wide range of respondents was targeted. Views from CA(SA)’s in different occupations and industries with different levels of prior professional experience and job levels were obtained (Refer to Table 2 and Figure 1). Convenience and snowballing sampling were used as surveys were distributed via e-mail, LinkedIn and the researchers’ network. Recipients of the survey were encouraged to forward the survey to their networks and any other potential participants in the research study (Leedy & Ormrod, 2019). To ensure that there was a balance in the different respondent groups, individual respondents were at times asked to participate in the study during the response time period. 32 A total of 103 responses were completed and captured at the time of closing the survey on Qualtrics. A response rate could not be determined as snowballing and conventional sampling methods were used (Crawford et al., 2018). A summary of the biographical information of the sample size of respondents who completed the survey is contained in Table 2. Each respondent has been given a naming convention based on their occupational group (e.g. AUD) and the respective numerical value (e.g. 25), in chronological order, of their response to the survey to identify individual respondents (e.g. respondent AUD25) where applicable in the study. The following naming convention has been applied to each occupational category: • Auditor respondents: AUD • Academic respondents: ACA • Preparer of financial statement respondents: P • Regulator or standard setter respondents: R/S • User respondents: User 3.3. Instrumentation The survey was developed using prior literature and the objectives of the IASB in a PIR (IASB, 2021a). The research instrument drew on the survey and interview instruments used by Altaji and Alokdeh (2019) and Haggenmüller (2019) respectively. The survey had predominantly closed- ended questions with a 5-point Likert scale (Altaji & Alokdeh, 2019). A Likert scale is used to measure and quantify the perceptions of respondents (Leedy & Ormrod, 2019). The Likert scale enables descriptive and basic inferential statistics to be conducted. One open- ended question at the end was included for participants to add anything they felt was important with regards to the implementation of IFRS 15. The final survey distributed contained 33 questions in total (including consent questions, background geographical information questions and the single open-ended question). The survey was developed and kept in electronic format in Qualtrics (a reputable online survey platform). No hard copies of the survey were distributed. Refer to Appendix B for the full survey used for this research study. 3.4. Procedure and time frame The research process began with a pilot study of researchers and academics at the University of Witwatersrand (Kelley et al., 2003; Van Teijlingen & Hundley, 2001). After the pilot study was conducted and the data from the pilot study were analysed, appropriate amendments to the survey were made. No necessary adjustments were needed to the survey instrumentation. The completed survey was then published on Qualtrics. Surveys were distributed to potential respondents via LinkedIn and e-mail (as described in Section 3.2). The survey was made 33 available via LinkedIn to ensure that a wider CA(SA) audience was reached. In all surveys distributed, a link to the survey was included in the email or online post so that intended respondents had easy access. Respondents were located throughout South Africa. Survey distributions included a brief summary of what the purpose of the research study is. All potential participants were provided with an information sheet detailing the background of this research (that was also included as part of an email or LinkedIn post), the participants’ rights and the contact number of the researchers for respondents who may have had any questions after completing the survey (Leedy & Ormrod). Voluntary participation was made clear on the information sheet contained in the survey. Consent of the respondents was required and obtained before participants completed the survey. It was also stated on the survey that responses will remain anonymous and confidential, except to the researcher and the supervisors of this study (Kelley et al., 2003). Participants were also required to declare if they are carriers of the CA(SA) designation and have had prior working experience with IAS 18 to ensure that they met the requirements to participate in the study. The survey remained open for 1 month to allow sufficient response time. The researcher sent daily emails and messages to potential participants. The researcher aimed to ensure that a balance of completed responses from CA(SA)’s in different occupational backgrounds was obtained. After 1 month the completed responses were collected and the survey was closed. At the time of closing the survey, 170 responses were recorded in Qualtrics. Of the 170 recorded responses, only 103 responses were fully completed and valid (60.58% completed response rate). The data were then exported to excel and SPSS for data analysis. Responses are managed and kept in Qualtrics which is username and password protected. 34 3.5. Summary and discussion of the sample group Table 2: Biographical information of the CA(SA) respondents to the survey Occupation/Role Years of experience > 15 years 10-15 years 5-10 years 3-5 years 1-2 years Grand Total Academics 8 7 7 7 1 30 Executive management 1 1 - - - 2 Senior management 6 4 4 5 1 20 Junior management 1 2 3 2 - 8 Auditors 5 6 11 3 - 25 Executive management 2 2 1 - - 5 Senior management 2 4 6 - - 12 Junior management 1 - 4 3 - 8 Preparers of financial statements 10 5 18 4 - 37 Executive management 6 2 2 - - 10 Senior management 3 3 11 1 - 18 Junior management 1 - 5 3 - 9 Regulators/standard-setters - - 3 1 - 4 Senior management - - 1 - 1 Junior management - - 2 1 - 3 Users of financial statements 2 2 2 1 - 7 Executive management 1 - - - - 1 Senior management 1 2 1 - - 4 Junior management - - 1 1 - 2 Grand Total 25 20 41 16 1 103 A summary of respondents’ biographical information is provided in Table 2. There was a fair mix of responses from auditors, academics, and preparers of financial statements. Only 4 responses were obtained from regulators and standard setters and 7 from users of financial statements, as is often a weakness in accountancy research (Peters, 2016; Stainbank & Peebles, 2006). Per Table 2, the majority (83,5%) of the respondents are CA(SA)’s with professional experience of 5 years or greater. Many respondents hold senior executive positions at their respective organisations. The responses collected provide valid data to address the research objective as a sufficient mix of experience and expertise is represented from the accounting field. The dataset comprised 53.4% males, 44.7% females and 1.9% who preferred not to say. 35 Figure 1: Industry classification of respondents As indicated by Figure 1, the industry of respondents are not evenly distributed as 67% of completed responses come from two industries. Given the uneven distribution of responses, comparative statistics among industries will not provide appropriate insights and were not performed (Bloomfield et al., 2016). The data responses from industries are analysed where appropriate to contribute to the exploratory nature of this research study (Leedy & Ormrod, 2019). 3.6. Data analysis and interpretation Survey data are ordinal where a higher score implies that IFRS 15 provides more useful information than IAS18, IAS 11 and its related interpretations. Descriptive statistics and frequency plots are used to provide initial insights into respondents’ views on respective standards. Descriptive statistics such as the data mean, standard deviation, mode and median of the data set is provided (Leedy & Ormrod, 2019). The descriptive statistics are broken down into the various respondent groups (auditor, preparer of financial statements, academic, regulators and users) to enable basic inferential statistics to be conducted on the data 38 1 2 10 3 3 7 31 8 0 5 10 15 20 25 30 35 40 Responses per industry Total 36 collected. The current job level and years of professional experience of respondent groups are analysed where applicable and relevant. Graphical representations are used where appropriate (Leedy & Ormrod, 2019). Descriptive data is mainly used to analyse respondents’ perceptions of IFRS 15 in relation IAS 18 and its related interpretations. Descriptive data in conjunction with inferential statistics will be used to answer the research question of this study (Leedy & Ormrod, 2019). Kruskal Wallis tests are used in determining if there are any statistically significant differences in the perceived usefulness of IFRS 15 in comparison to IAS 18 between the different groups of CA(SA) respondents. The grouping variables are the occupational and industry categories of respondents, and the dependent variables are the survey responses per question. The assumptions related to Kruskal Wallis tests are addressed in Section 3.6 below. The following relationship is apparent and is investigated when answering the research question of this study: Perceived usefulness of IFRS 15 in comparison to IAS 18= f (occupation of the respondent) 3.7. Reliability and validity of the study The survey was piloted by senior researchers and academics to ensure that the survey questions are objective, non-leading and relevant. The survey was then updated based on the results of the pilot study to ensure that the variables that the survey aims to measure are complete and measures what it intends to measure. The pilot study aimed to improve the face and content validity of the study (Kelley et al., 2003; Leedy & Ormrod, 2019; Van Teijlingen & Hundley, 2001). Cronbach’s alpha test was performed to ensure added reliability and internal consistency of the survey instrument. Cronbach’s alpha is a reliability method for reliability and consistency which is used to determine if the measurement tool can be used to provide the same or similar results if the tool was reapplied to the same or a similar sample size of the study. The reliability analysis on completed surveys reported a Cronbach’s alpha of 0.932 for the close-ended survey questions. The Cronbach's Alpha coefficient ratio indicates a high degree of overall reliability for the survey instrument. In terms of the assumptions of the Kruskal-Wallis and Mann-Whitney U tests the dependent variables should be ordinal or continuous (Laerd statistics, 2022; Leedy & Ormrod, 2019). The dependent variables are ordinal because the survey measures respondents’ perceptions and understanding, using a Likert scale. The independent variable should be categorically performed (Laerd statistics, 2022; Leedy & Ormrod, 2019). The occupation, job level, industry 37 and gender of respondents are categorical, independent groups. In addition to the above, all observations should be independent (Laerd statistics, 2022). The observations (perceptions) of respondents have independence because each respondent will have no relationship with another respondent. Respondents’ perceptions are independent. The data is assumed to be not normally distributed (Laerd statistics, 2022). The survey instrument was developed cognisant of the questions asked and assessments made in previous IASB PIRs (IASB, 2021a, 2021b). In addition, the supervisors of this study have extensive experience and expertise in conducting research involving human participants which adds to the reliability and validity of this study (Leedy & Ormrod, 2019). Potential respondents were sourced from the best South African universities, South African audit firms and South African listed companies through LinkedIn, email and the researchers’ network. It is noteworthy that completed responses consist of responses from Chief Financial Officers (CFOs) of companies listed on the Johannesburg Stock Exchange (JSE), CFOs of unlisted companies, Financial Directors and Managers of both listed and unlisted companies, audit partners from the big four audit firms, Board of Director members, Chief analysts, Heads of accounting schools and divisional heads of the different financial accounting departments of major South African universities. The experience and expertise of respondents enhances the reliability and validity of the data obtained. Before the start of the survey on Qualtrics, respondents were asked to confirm (with either a yes or no response) if they were holders of the CA(SA) designation. Only CA(SA) holders were allowed to continue and complete the survey. All non-CA(SA) respondents were noted and ignored from the population of responses for the survey. 3.8. Ethical consideration The survey questions were posed to experts involved in different professions within the accounting field and pose no threat to the respondent’s safety. The questions posed were a conversation (in the form of a survey) with the respondents, in which the professional perceptions of respondents were captured. The survey deals with questions regarding respondents’ ordinary professional work life and opinions on pertinent matters affecting the accounting profession which respondents have extensive knowledge on. Furthermore, ethical clearance was obtained from the University of the Witwatersrand prior to the commencement of this study. The research study has an ethics clearance protocol number of SOA-2022-07- 10. 38 SECTION 4: RESULTS 4.1. Summary of findings A summary of the data is provided in Table 3 which presents the average outcome preference (IFRS 15, IAS 18, neutral or mixed) of respondents by occupational category for the themes of this study. Supporting the findings of Altaji and Alokdeh (2019), the fundamental qualitative characteristics of faithful representation and relevance are perceived to have been improved for revenue information due to the implementation of IFRS 15. Overall, respondents felt that IFRS 15 represents an improvement over IAS 18 and IAS 11 for the following key themes: • fundamental qualitative characteristics; • enhancing qualitative characteristics; • usefulness of revenue information; • consistency of revenue information; • presentation and disclosure requirements; • guidance for revenue transactions. The IASB and FASB’s objective of unifying global revenue standards is perceived as achieved through the enhancement of consistent revenue information (Carruthers, 1995; Coetsee et al., 2022; Coetsee & Wyk; Dalkilic, 2014; IASB, 2008; Napier & Stadler, 2020; Ogunode & Salawu; Peters, 2016; Veronica & Marian, 2016; Wagenhofer, 2014). The better presentation and disclosure requirements appear to be one of the areas in IFRS 15 which have contributed to the preference of IFRS 15 in improving useful information (Boujelben & Kobbi-Fakhfakh; Coetsee et al.). The applicability of IFRS 15’s 5-step model across different industries adds strength to this (Boujelben & Kobbi-Fakhfakh, 2020; Coetsee et al., 2022; IASB, 2008, 2014b; Ogunode & Salawu, 2021; Tong, 2014). 75,7% of respondents agreed that the 5-step model can be applied across different industries contributing to the enhancement of consistent revenue recognition. IFRS 15 was the preferred choice (61.3%) over IAS 18 and IAS 11 for providing better guidance for complex revenue transactions because of the IASB’s extensive due process which involved consultations with many constituents and the accounting public in general. Providing increased guidance on revenue accounting was a deficiency which the IASB sought to address by issuing IFRS 15 (Boujelben & Kobbi-Fakhfakh, 2020; Dalkilic, 2014; IASB, 2008, 2014a, 2014b; Napier & Stadler, 2020; Tong, 2014; Usurelu & Dutescu, 2018). Not all respondents share mutual feelings about IFRS 15 when it is compared with IAS 18, IAS 11 and its related interpretations. Auditors (and regulators) favoured IFRS 15 the most when it 39 was compared to IAS 18 and IAS 11 with academics and preparers having slightly less favourable perceptions. Users do not perceive IFRS 15 in the same light as the rest of the respondent groups with users being mixed or neutral between IFRS 15 and IAS 18 for many of the themes dealt with by this study. The data collected from each occupational category are analysed in detail next. Overall, it seems that the IASB’s objective of improving the provision of useful information about revenue has been achieved from the perception of CA(SA)’s in South Africa. 4.2. Perceptions of respondent groups Users of financial statements had the lowest mean scores and mixed responses, with mean scores close to 3 for the majority of the themes of this study. Users of financial statements were mixed and neutral between IFRS 15 and IAS 18 indicating that this group of respondents does not generally think IFRS 15 is a major improvement to the previous revenue standards. Caution should be used when interpreting this finding because of the small sample size (7/103) obtained. Users supported the view that the 5-step model has applicability among different industries: this contradicts their thoughts about the consistency and comparability improvements in IFRS 15. This indicates that users are aware of the 5-step model and what it aims to achieve (Boujelben & Kobbi-Fakhfakh, 2020; IASB, 2008, 2014b; Napier & Stadler, 2020). User1 completely favoured IAS 18 and IAS 11 more than IFRS 15 (average score of 1 for all useful information themes). User1 preferred IAS 18 and IAS 11 over IFRS 15 regarding the fundamental and enhancing qualitative characteristics of useful information themes, for the guidance on both simple and complex revenue transaction themes, and for the presentation and disclosure requirements of revenue theme. Users are not in a good position to appreciate the improvements brought about by IFRS 15. Users are not on management or audit teams to have access to detailed information to notice how revenue under IFRS 15 is a better faithful representation of the underlying economic activities than IAS 18 and IAS 11 was. The lower experience level with the applic