engleski

Non-financial Reporting Implementation - A Croatian-German Contemplation

Non-financial reporting is considered of great importance nowadays since only financial reporting is not sufficient to get a complete picture of business operations. This is reflected in the EU Directive 2014/95/EU, which is known as a corporate social and responsibility reporting Directive. EU member states had to incorporate the requirements of this Directive into their national legislation and start to implement them as of financial year 2017. The aim of this study is to comprise the non-financial reporting habits of Croatian and German companies before and after the effective date of the Directive. A research on disclosures regarding the environmental, social and employee-related, human rights, anticorruption and bribery matters has been carried out on a sample of nine Croatian and nine German large companies. Even though some companies disclose the financial and non-financial information under the integrated report, most companies prepare a separate report in the form of sustainability report, management report, non- financial report or disclose non-financial information under the annual report since the formal structure of this kind of reporting is not prescribed. Using the content analysis method, all kinds of the non-financial statements have been analysed. Both, Croatian and German companies have started to report about non-financial issues even before the Directive came into force. After the effective date, it was noticed that they improved their non-financial statements, but not significantly. Even though Croatian and German companies are aware of the importance of reporting on non- financial issues, there is still room for improvements. Since there are many different kinds of reports, the companies should think about to prepare an integrated report in order to summarize the disclosures and make them concise, and to avoid multiple disclosures under the different kinds of reports. That would simplify the preparation techniques and improve the relevance of the integrated report. This study has some limitations, in the first line a small sample of companies which reports have been observed. Future studies could consider more companies in the research sample and the impact of the company’s characteristics on the quality of non-financial reporting. This could enlarge the using of statistical methods in research and improve overall conclusion in terms of statistical significance.

non-financial reporting ; EU Directive ; Croatia ; Germany

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