Changes in Accounting Estimates. Exploring Impact and Trends

This study explores the frequency and distribution of changes in accounting estimates across different industries and company sizes, and develops a typology of firms: one time-changers, occasional changers and chronical changers. The findings indicate that industries characterized by complex operations and high uncertainty, such as manufacturing and services, report the largest number of estimate adjustments, whereas sectors such as agriculture and public administration predominantly record single adjustments. The results confirm a significant association between industry type and the frequency of changes (p< 0.001). Moreover, the study makes an original contribution by identifying and analyzing patterns in firms’ accounting estimate changes. It also investigates the impact of firm size on the number of changes in accounting estimates – an aspect that has received limited attention in the existing literature, which has primarily focused on the underlying motivations for adjustments or on earnings management strategies. The findings of this study are relevant for managers, investors, auditors, and standard-setters, as they support decision-making processes and the development of control and reporting policies tailored to the specific characteristics of each industry. Nevertheless, the study is exploratory in nature but can serve as a foundation for future research adopting predictive or longitudinal approaches, incorporating a larger sample of companies and additional variables captured at the individual level.