Naslov
Trends in financial reporting disclosures – influence of company size

Autori
Rep, Ana ; Dečman, Nikolina ; Žager, Katarina

Vrsta, podvrsta i kategorija rada
Sažeci sa skupova, prošireni sažetak, znanstveni

Izvornik
TAKE 2022 - THEORY AND APPLICATIONS IN THE KNOWLEDGE ECONOMY 2022, CONFERENCE BOOK OF ABSTRACTS / - Porto, 2022, 169-171

Skup
TAKE 2022 Theory and Applications in the Knowledge Economy

Mjesto i datum
Porto, Portugal, 06.07.2022. - 08.07.2022

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
Financial statements quality ; transparent reporting ; relevant disclosures ; company size

Sažetak
Financial statements are a key tool for financial analysis. Prior studies have already observed that the quality level of disclosures in financial statements is not at a high level. The purpose of the research is to evaluate the quality level of disclosures in the financial statements based on the determined disclosure index developed according to prior studies but adapted by adding additional items. More detailed, the authors want to determine which factors influence the quality level of the disclosures depending on the size of a business entity. In that context, the authors will be able to propose the guidelines for more proper and transparent financial reporting. The research will be done by applying the content analysis method and regression model by the Ordinary Least Squares method. 30 entities registered in the Republic of Croatia from each size category (micro, small, medium-sized and large) will be randomly selected, making a research sample of 120 observed business entities. After determining the disclosure index, the authors will analyse the financial statements of entities chosen based on the disclosure index checklist. Research results will be presented using descriptive statistics. In addition, the regression model will be employed to evaluate the influence of the size of an entity on disclosure quality. Furthermore, based on the regression equation, the authors will explain the influence of different accounting and financial categories on the quality of information disclosed in the financial statements. Finally, the overall conclusion on the quality level based on the size of an entity will be presented. Although the accounting information systems have reached their most sophisticated levels ever, there is still room for improvements in financial reporting, primarily from the perspective of transparent and relevant reporting. Accounting systems specialised for financial statements compilation are still not developed up to the level of automated assessment of which information is relevant for stakeholders and, accordingly, desirable for disclosure even though not mandatory according to the accounting standards and legislation. Humans, specifically accountants and managers, still play a key role in decision-making, either from the perspective of choosing among accounting policies or deciding which information should be presented in financial statements. Supporting that theory, several studies have already proved that the quality of disclosures in financial statements is not at a high level. In addition, many factors could influence the level of relevant disclosures. The research will be conducted to evaluate some of them and compare them with prior studies. The research is expected to prove that larger entities disclose more relevant information in their financial statements than smaller entities. In addition, it is likely that control variables such as the internationalisation of a business, audits carried out, and some financial ratios could also influence the disclosure level depending on the size of an entity. By analysing the gathered results, the authors will elaborate on the research and give some guidelines for improving disclosure relevance. The proposed research is considered primary research constructed based on prior studies, and it should give valuable results based on which a broad spectrum of stakeholders could have benefits ; accountants from the perspective of preparing more transparent and relevant disclosure, and external financial reporting stakeholders from the perspective of having better inputs for making business decisions. By analysing the current trends in financial reporting, authors will contribute to better communication in financial reporting. The results and proposed guidelines will be relevant for accountants, other business professionals, and external financial reporting stakeholders. Accountants and business professionals, specifically managers, could implement proposed guidelines to improve the quality of the financial statements. On the other hand, external financial reporting stakeholders will have more transparent and relevant information for decision making or, at least, will be aware of further analysis of existing financial reports that is crucial for consideration when making decisions.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA