Financial Statement Data Gathering Efforts

11 September 2019

Financial Statement Data Gathering Efforts

FAR supports the audit firms as part of its data collection efforts with the collection of the financial statement data from sources such as the Dutch trade register, investor relations websites of listed companies, and AFM filings. Until the spring of 2019 most audit firms collected these data themselves. Some firms concluded that almost 70% of their data gathering efforts was invested in hand-collection of information from public data sources.

This was a large burden to the firms and did slow down the pace and reduced the feasible sample sizes especially of research projects using archival data. Therefore, FAR started to support the firms with collecting this data. An analysis of the available scientific databases with financial statement data showed that also the available databases regularly have missing data, not always have the required level of detail of data and have other data quality issues. Given the investment of the audit firms in unlocking unique proprietary data, FAR decided to actively support the audit firms and research teams with the hand-collection of information from publicly available sources. 

Late spring, summer, and early fall are the best times for FAR to collect data with the audit firms, as this is usually outside of busy season of the firms and the researchers completed most of their education requirements at the universities.

During the summer of 2019 FAR employed seven research associates, who assist FAR next to their fulltime business or accounting study. This helps the research associates to gain a deep understanding of and see many different financial statements. All research associates are under a non-disclosure agreement and are independent of the research teams for which they collect data to ensure audit client confidentiality. In total there are currently 10 FAR archival data projects for which FAR gathered financial statement data for more than 5,000 financial statements, which the researchers will be able to incorporate in their archival and/or survey data. This brings the data collection goal to more than 340,000 unique hand collected data-points. Practical complications exist relating to the completeness of the trade register and late or non-filing of some companies that are in the sample selections. The research projects do usually not exclude such companies from the sample, as these observations are especially interesting for the research on audit quality. For more information, contact us at: info@foundationforauditingresearch.org.    

Back to overview