scholarly journals Narrative reporting

2021 ◽  
pp. 45-60
Author(s):  
Katarzyna Czajkowska ◽  
Marek Masztalerz ◽  
Ana Rep
Keyword(s):  
Financial Reporting ◽  
Information Needs ◽  
Management Accounting ◽  
Irrelevant Information ◽  
External Control ◽  
Significant Shift ◽  
Narrative Reporting ◽  
Written Descriptions ◽  
Accounting Reports

For years financial and management accounting reports were based primarily on “hard” numbers. Extensive written descriptions and explanations were not common in practice. However, in recent decades there has been a significant shift towards “softer” and more narrative communication in accounting. The purpose of the chapter is to identify and describe the determinants of the develop-ment of accounting narratives in practice, and to explain why narratives are gaining importance in accounting communication. The chapter presents the links between accounting and language, the development of accounting narratives and the factors determining the use of narratives.Narratives give economic units the opportunity to explain the situation and the achieved finan-cial results. The use of narratives helps to better meet the information needs of stakeholders. There are still many challenges ahead of narrative financial reporting, such as determining the minimum content of reports, ensuring comparability of reports or the issue of external control of narrative financial reporting.An insufficient application of professional accounting materiality judgment is considered as one of the main causes of disclosing too much irrelevant information and not enough relevant informa-tion. Preparers of narrative reports should be aware that without applying materiality principle the information disclosed in the reports are not considered transparent and stakeholders lose confidence in such companies.

scholarly journals Content requirements for narrative reporting in the public sector: a contextual perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Benson Igboke ◽  
Razaq Raj
Keyword(s):  
Public Sector ◽  
Service Delivery ◽  
Financial Reporting ◽  
Information Needs ◽  
Financial Statements ◽  
Financial Reports ◽  
Content Type ◽  
The Public ◽  
Narrative Reporting ◽  
The Impact

Purpose Accounting literature is definite about the content and presentation of traditional financial statements, but the basic information to be provided in the narrative reports of public sector entities remains unsettled. This paper aims to investigate the needs and expectations of stakeholders (primary users and preparers) regarding the content and presentation of narrative reports in the public sector of Nigeria. Design/methodology/approach The research used a qualitative approach that draws on stakeholder and contingency theories to collect primary data through in-depth individual interviews using semi-structured questionnaires. Data were analysed by a thematic method using the NVivo 11 Pro software package. Findings The study reveals that financial statements constitute the statutory financial reports of public sector entities in Nigeria as narrative reporting is undeveloped, both as a concept and in practice. Stakeholders believe that narrative reporting is required to enhance the accountability usefulness of the annual financial reports published by the government and public agencies. Data analysis further reveals that public perception about the management of government financial resources influences the information needs of stakeholders regarding financial reporting. In addition, stakeholders consider the approved budget as the cornerstone of public financial reporting. Accordingly, users and other stakeholders expect public sector narrative reports to provide budget-based performance information that relates the accounting data presented in the financial statements to the key budgetary provisions, in both financial outlays and service delivery achievements. Stakeholders also expect narrative reports to be presented in plain language and provide information about the impact of financial decisions and actions on the basic socioeconomic variables that signpost citizens’ well-being, such as education, health care, employment and security. Practical implications The study suggests that the inclusion of narrative information in the statutory financial reports of public entities in Nigeria is imperative and should engage the attention of policymakers and relevant regulatory authorities. In addition, a more elaborate systematic investigation of the information needs of stakeholders in Nigeria should be undertaken by relevant units of government. Originality/value To the best of the authors’ knowledge, this is the first documented research on narrative reporting and the information needs of a broad range of stakeholders in the public sector of Nigeria. The paper identifies the approved budget as the focal point of governmental financial reporting, and a clear linkage between budget provisions, accounting results and service delivery achievements as the basic content of a narrative report in developing countries.

scholarly journals International outlook: The notes and business report in the frame of financial reporting

2017 ◽  
Vol 11 (1-2) ◽  
pp. 155-165
Author(s):  
Veronika Fenyves ◽  
Ildikó Orbán ◽  
Zoltán Bács ◽  
Ildikó Réka Cardoş ◽  
Silvia Tóbiás Kosár ◽  
...  
Keyword(s):  
Social Responsibility ◽  
Financial Reporting ◽  
Information Needs ◽  
International Standards ◽  
Accounting Principles ◽  
Adequate Information ◽  
Accounting Report ◽  
Special Approach ◽  
Jel Code ◽  
Accounting Reports

Are the accounting reports to be prepared on a yearly basis suitable for indicating problems, possibly for informing the stakeholders about the declining phase of an enterprise? The information needs of the various market operators are different thus the question is whether the management of an enterprise or possibly the owners place an emphasis on the adequate information. We examine the issue of social responsibility from a special approach in which, in addition to the corporate lifecycle models, there is a focus on the information content of the Hungarian and international accounting reports, moreover the content of the further report that is to be prepared but does not form a part of the accounting report. The aim of our research is to compare the notes and the further reports which meet the Hungarian, Rumanian, Slovakian and international standards and corroborate the quantitative data of the accounting report. By paralleling the notes and the further reports, we draw attention to the fact that one of the most important accounting principles i.e. the going concern concept, which the other principles are based on, will be (or will likely be) affected insofar as content of the enterprises’ reports does not comply with the legislation. In addition to the addressees of accounting, the authors point at the issue of social responsibility based on those similarities which can be observed in the relations of the value-oriented corporate governance. JEL. Code: M41

OBJECTIVES OF FINANCIAL REPORTING, ABORIGINAL COST, AND POOLING OF INTERESTS ACCOUNTING

2012 ◽  
Vol 39 (2) ◽  
pp. 45-80 ◽  
Author(s):  
Hugo Nurnberg
Keyword(s):  
Public Policy ◽  
Financial Reporting ◽  
Information Needs ◽  
Public Utility ◽  
Financial Reports ◽  
Policy Makers ◽  
Business Combinations ◽  
Decision Usefulness ◽  
Rate Base ◽  
Utility Rate

ABSTRACT Through the years, pooling of interest accounting was criticized as contrary to the decision usefulness objective of financial reporting and potentially misleading to stockholders and creditors, the assumed principal users of financial reports. This paper does not dispute those criticisms. It demonstrates, however, that there were some very good reasons for permitting pooling accounting for certain business combinations when the method was developed in the 1940s. At that time, the basic objectives of financial accounting encompassed stewardship and decision usefulness for multiple users, including public utility regulators and public policy makers. Pooling accounting developed in part to satisfy the information needs of public utility regulators who favored aboriginal (original historical) cost to determine the utility rate base; additionally, it was favored by public policy makers who sought lower utility rates (prices) to foster social and economic goals.

Discretion in Financial Reporting: The Voluntary Adoption of Fair Value Accounting for Employee Stock Options

2004 ◽  
Vol 18 (2) ◽  
pp. 97-108 ◽  
Author(s):  
Dahlia Robinson ◽  
Diane Burton
Keyword(s):  
Financial Reporting ◽  
Fair Value ◽  
Stock Option ◽  
Employee Stock Options ◽  
Market Returns ◽  
Employee Stock Option ◽  
Accounting Reports ◽  
Voluntary Adoption ◽  
The Impact ◽  
Is Value

This paper investigates the market reaction to announcements by firms of their decision to adopt the fair value provisions of SFAS No. 123 in accounting for their employee stock option (ESO) expense. Additionally, this paper examines ESO usage and expense of adopting firms and compares the impact of the expense on profitability measures for adopting firms relative to a matched set of control firms. We find a positive and significant abnormal return in the three days around the adoption announcements, suggesting that the decision to expense using the fair value method is value relevant. The positive abnormal announcement returns are mainly attributable to the earlier announcements, consistent with early announcements serving as a credible signal of a commitment to transparency in financial reporting. We find evidence that in the three years prior to the announcement year, adopting firms report significantly higher earnings than control firms yet fail to earn higher market returns, suggesting that adopters stand to benefit the most by improving the market's perception of their accounting reports. We also find that ESO usage, ESO expense, and the impact of ESO expense on profitability are significantly lower for adopters relative to control firms, although the impact of ESO expense is economically significant for 43 percent of the adopters.

scholarly journals ERRORS AND FRAUD IN ACCOUNTING. THE ROLE OF EXTERNAL AUDIT IN FIGHTING CORRUPTION

10.26458/1743 ◽  
2017 ◽  
Vol 17 (4) ◽  
pp. 29-36
Author(s):  
Luminita Ionescu
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
External Control ◽  
Electronic Systems ◽  
High Quality ◽  
External Audit ◽  
Strong Connection ◽  
Recent Developments

Accounting errors and fraud are common in most businesses, but there is a difference between fraud and misinterpretation of communication or accounting regulations. The role of management in preventing fraud becomes important in the last decades and the importance of auditing in curbing corruption is increasingly revealed. There is a strong connection between fraud and corruption, accelerated by electronic systems and modern platforms.The most recent developments tend to confirm that external auditing is curbing corruption, due to international accounting and auditing standards at national and regional levels. Thus, a better implementation of accounting standards and high quality of external control could prevent errors and fraud in accounting, and reduce corruption, as well.The aim of this paper is to present some particular aspects of errors and fraud in accounting, and how external audit could ensure accuracy and accountability in financial reporting. 

scholarly journals The Common Good Balance Sheet, an Adequate Tool to Capture Non-Financials?

2019 ◽  
Author(s):  
Christian Felber ◽  
Vanessa Campos ◽  
Joan Ramon Sanchis
Keyword(s):  
Organizational Performance ◽  
Financial Reporting ◽  
Common Good ◽  
Information Needs ◽  
Balance Sheet ◽  
Validity And Reliability ◽  
Integrated Reporting ◽  
The Common Good ◽  
Corporate Reporting ◽  
The Common

In relation to organizational performance measurement, there is a growing concern about the creation of value for people, society and the environment. The traditional corporate reporting does not adequately satisfy the information needs of stakeholders for assessing an organization’s past and future potential performance. Practitioners and scholars have developed new non-financial reporting frameworks from a social and environmental perspective, giving birth to the field of Integrated Reporting (IR). The Economy for the Common Good (ECG) model and its tools to facilitate sustainability management and reporting can provide a framework to do it. The present study is the first one that empirically validates such metrics on a sample of 206 European firms. Consequently, it allows knowledge to advance as it checks their statistical validity and reliability.

scholarly journals Financial Reporting and Stakeholders’ Information Needs in Nigerian Companies

2020 ◽  
Vol 8 (3) ◽  
Author(s):  
Abel Aigbodion Asein ◽  
Ishola Rufus Akintoye ◽  
Folajimi Festus Adegbie
Keyword(s):  
Financial Reporting ◽  
Information Needs

scholarly journals Dilemmas of Financial Reporting as the Reliable Information Source of an Entity Performance Results

Equilibrium ◽  
2012 ◽  
Vol 7 (2) ◽  
pp. 77-95
Author(s):  
Joanna Zuchewicz
Keyword(s):  
Financial Reporting ◽  
Information Needs ◽  
Information Source ◽  
Accounting Standards ◽  
Global Market ◽  
International Accounting ◽  
International Accounting Standards ◽  
Financial Reports ◽  
Economic Entity ◽  
Basic Source

The objective of the hereby paper is to indicate, on the one hand, the need for transformations in financial reporting as the basic source of information about the financial situation of an economic entity indispensable in the decision making process by its users, and on the other to provide the analysis of the adopted reporting reconstruction directions validity, as suggested by international financial community. On the basis of comments and reservations presented by practitioners and the analysis of research conducted by scientific circles the thesis is put forward by the Author that the suggested extension of information scope to be disclosed in obligatory financial reports proposed by the authorities responsible for the preparation of international accounting standards will not increase the usefulness of information they include and will not influence higher security of business transactions. The paper is divided into there interrelated parts. The first presents the overview of critical opinions expressed by financial circles regarding accounting as the system generating information about the achievements of entities operating at the global market. The second refers to an entity stakeholders and their information needs. Irrespectively of opinions about the primacy of investors and their rights in making investment decisions it is of great importance to meet the needs of the remaining interest groups by means of providing both reliable and useful information in financial statements. The final part of the paper presents an outline of undertaken and suggested restructuring directions in financial reporting proposed by IASB and FASB, as the institutions responsible for preparing international accounting standards. This part also discusses the selected suggestions by Polish researchers regarding the form and content of particular components included in a financial statement.

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