This research examines the extent to which user needs are affected by differences in the size and ownership characteristics of reporting entities. Bank loan officers constitute the target group of financial statement users and the study focuses on the perceived need for sixteen financial statement items. Among these are twelve items for which differentiation in financial reporting has been proposed (key items), and four items that bankers generally require when evaluating a loan application (control items) . The research model is based on the hypothesis that perceptions of accounting information are affected by the decision context, complexity of the organization in which the decision is being made, and the behavior response repertoire of the user.

A quasi-experimental design with two treatments is utilized. The treatments are (1) a commercial loan decision involving a small privately held corporation, and (2) a commercial loan decision involving a large public corporation. A questionnaire was mailed to gather the data. Three hundred and fifteen usable responses were received, for a response rate of 21%.

The data were analyzed using multivariate analysis of variance and canonical correlation analysis. Differences in the size and ownership characteristics of commercial loan applicants were found to have a statistically significant impact on the perceived needs of bankers for financial statement information. This relationship is most observable among disclosures that are perceived to be of lesser importance in the loan evaluation process. The perceived needs for items that are considered to be of greater importance (for example, the control items) are relatively insensitive to variations in the size and ownership characteristics of commercial loan applicants. Overall, commercial loan officers tend to perceive a relatively high need for general financial statement items, but tend to downplay the importance of the more specific and detailed items.

The results also indicate that the organizational complexity of a bank, and the degree to which its commercial loan officers are committed to the work ethic of the banking profession, are significantly related to the perceived need for financial statement disclosures.