Uncertainty expressions in accounting: Critical issues and recommendations

Uncertainty expressions are used in accounting contexts to describe business information. Due to the widespread use of uncertainty expressions, accounting scholars have critically assessed their potential impacts in financial reporting, as well as in the context of judgement and decision-making behaviour. In line with this topic, this paper outlines several fundamental issues related to uncertainty expressions and grounds these research paradigms and empirical findings in the context of the behavioural-psychology literature. In this study, we propose a solution to reduce potential impacts of uncertainty expressions in accounting. We advocate the Verbal-Numerical (V-N) Scale strategy for the communication of objective accounting information. We also recommend the V-N Disclosure strategy for the communication of subjective accounting information by associating a mathematical strategy. Practical limitations and implications for future accounting research on uncertainty expressions are also discussed.