scholarly journals The Principle of Materiality and Its Practical Implementation in the Integrated Reporting of Corporate Enterprises

2018 ◽  
pp. 16-33
Author(s):  
K. V. Bezverkhiy
Keyword(s):  
Financial Reporting ◽  
Reporting System ◽  
Practical Implementation ◽  
Effective Management ◽  
Future Perspectives ◽  
Integrated Reporting ◽  
Model Risk ◽  
Essential Information ◽  
Materiality Thresholds ◽  
Resource Allocation Strategy

The materiality principle of materiality is central to the integrated reporting system of corporate enterprises, because, international practices confirm that to be informative, reports have to contain essential information defined by stakeholders and by company itself for taking effective management decisions. Yet, the materiality principle is not subject of much concern by the Ukrainian corporate sector when preparing, compiling, submitting and publishing integrated report. This raises the importance of studies on this principle implementation in integrated reports of Ukrainian corporate enterprises. The objective of the study is to analyze implementation of the materiality  principle in integrated reports of Ukrainian corporate enterprises by addressing the problems: (i) to give the characteristics of the materiality principle for financial reporting purposes; (ii) to show objects and materiality thresholds for individual forms of financial reporting; (iii) to describe the procedure of determining the materiality for integrated reporting purposes; (iv) to analyze the materiality aspects of integrated reports made by Ukrainian corporate enterprises; (v) to offer recommendations on implementing the materiality principle in integrated reporting of Ukrainian companies in keeping with international principles of integrated reporting. Practical use of the materiality principle in integrated reporting of Ukrainian corporate enterprises is illustrated by the sample of three companies: “NAKNAFTOGAS of Ukraine”, “DTEK”, and “BDO” Ltd. Recommendations for Ukrainian corporate enterprises on practical use of the materiality principle in integrated reporting are (i) to include the materiality principle in the main part of integrated reporting, with its description in the element “main principles of preparation and presentation”, which has been missing by far in integrated reporting of Ukrainian corporate enterprises; (ii) to use this principle for describing integrated reporting elements specified in the International Guidelines of Integrated Reporting: review of organization and external environment, management, business model, risk management, resource allocation strategy, operative results, future perspectives etc.

scholarly journals Risks in the System of Accounting and Financial Statements

2021 ◽  
Vol 10 (525) ◽  
pp. 290-297
Author(s):  
S. M. Semenova ◽  
◽  
O. M. Shpyrko ◽  
H. V. Ziabchenkova ◽  
O. P. Kuzmenko ◽  
...  
Keyword(s):  
Risk Management ◽  
Financial Reporting ◽  
Internal Control ◽  
Information Disclosure ◽  
Reporting System ◽  
Management Accounting ◽  
Professional Judgment ◽  
Integrated Reporting ◽  
Effective Response ◽  
Reporting Systems

The article is concerned with studying the risks that are formed in the accounting and financial reporting system, their grouping and characterization for effective management and improvement of enterprise performance. Risk management standards clearly indicate the responsibility of management in assessing risks, managing and reporting them. The transformation of user approaches and needs to complete and reliable information about the risks of enterprises, in particular to the preparation of integrated reporting, indicates that the process of improving both the management and the reporting systems is underway. Accounting simultaneously acts as a function of risk management through the creation of reserves and provisions, a means of displaying risks and decisions about them through disclosure of information in the reporting, and is also a source of risk formation. The literature highlights the latter aspect the least. On the basis of the carried out research, the following groups of risks arising in the accounting and reporting system are determined: risks in the field of application of international (or national) accounting and reporting standards; absence (inefficiency) of management accounting, tax planning, internal control, independent audit; risks of errors and fraud; risks of adverse changes in legislation. For each group, the enterprise will be able to choose the most effective response measures through distribution (by creating reserves, insurance, diversification, outsourcing, developing accounting policies and job descriptions) and reducing risks (through investing in staff education: trainings, seminars, courses and motivation, updating accounting software, compiling and reporting, substantiating professional judgment, improving the internal control system, regulating management accounting, integrated reporting, system solutions). Thus, in order to increase the efficiency of risk management, of practical value should be taking into account the risks of accounting and reporting systems, if we consider them as a source of risks, and not only as an instrument for administration or information disclosure.

Beyond Financial Reporting. Integrated Reporting and its determinants: Evidence from the context of European state-owned enterprises

2019 ◽  
pp. 43-72
Author(s):  
Giuseppe Nicolò ◽  
Gianluca Zanellato ◽  
Francesca Manes-Rossi ◽  
Adriana Tiron-Tudor
Keyword(s):  
Financial Reporting ◽  
Empirical Investigation ◽  
Gender Diversity ◽  
Accounting Standards ◽  
International Accounting Standards ◽  
Integrated Reporting ◽  
Financial Reports ◽  
The Public ◽  
Explanatory Factors ◽  
Board Gender Diversity

Integrated reporting (IR), which aims to overcome the limitations of both tradi-tional financial and stand-alone non-financial reports, has gained momentum as a single comprehensive tool merging financial and non-financial information. Initially conceived for private sector entities, IR is also establishing itself in the public sector context as a vehicle for transparency and accountability. This research offers an empirical investigation of IR practices in the State-Owned Enterprises (SOEs) context. More specifically, the paper investigates the levels of disclosure provided through IR by a sample of 34 European SOEs and explores the effects of potential explanatory factors. The results indicate a fair level of IR disclosure and a trend of reporting information already requested under international accounting standards. The findings also highlight that industry (basic materials and financials) and size positively influence the level of IR disclosure in a particularly strong way, while governance features (board size and board gender diversity) and the provision of external assurance do not exert any impact.

Particularities of the independent auditor's report on reliability of accounting (financial) statements for 2019: COVID-19 as qualitatively essential information (Part 2)

2020 ◽  
Vol 23 (7) ◽  
pp. 777-799
Author(s):  
O.I. Shvyreva ◽  
Z.I. Kruglyak ◽  
A.V. Petukh
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Economic Situation ◽  
Risk Disclosure ◽  
Essential Information ◽  
Logical Method ◽  
Annual Reporting ◽  
The Face ◽  
Key Aspects ◽  
The Impact

Subject. This article discusses the issues related to the practice of financial reporting in the face of uncertainties caused by the coronavirus contagion, as well as the specifics of the audit strategy and formation of an audit opinion on this reporting. Objectives. The article aims to identify the quality characteristics of financial reporting prepared in the context of the COVID-19 pandemic and justify the key aspects of assurance engagement completion in an extremely uncertain epidemiological and economic situation. Methods. For the study, we used an abstract-logical method, content analysis techniques, systematization, and classification. Results. Analyzing the impact of the extremely uncertain epidemiological and economic situation on financial statements, the article clarifies aspects of disclosure of events after the reporting date and threats to business continuity in the annual reporting of economic entities. The article identifies possible alternative procedures and algorithms to obtain proper evidence when it is insufficient in the face of the inability to meet certain audit standards requirements in a remote audit environment. The article defines the impact of COVID-19 risk disclosure on the structure of the audit report and opinion. Relevance. The results of the study can be used in the practical activities of economic entities that prepare financial statements in the face of significant uncertainty, as well as auditors and audit organizations.

scholarly journals Past, Present and Future Perspectives on Groundnut Breeding in Burkina Faso

Agronomy ◽  
2020 ◽  
Vol 10 (5) ◽  
pp. 704
Author(s):  
Moumouni Konate ◽  
Jacob Sanou ◽  
Amos Miningou ◽  
David Kalule Okello ◽  
Haile Desmae ◽  
...  
Keyword(s):  
Burkina Faso ◽  
Development Research ◽  
Future Perspectives ◽  
Major Drawback ◽  
Essential Information ◽  
Biotic Stresses ◽  
The Past ◽  
Political Independence ◽  
Arachis Hypogaea L ◽  
Yield Penalty

Groundnut (Arachis hypogaea L.) is a major food and cash crop in Burkina Faso. Due to the growing demand for raw oilseeds, there is an increasing interest in groundnut production from traditional rain-fed areas to irrigated environments. However, despite implementation of many initiatives in the past to increase groundnut productivity and production, the groundnut industry still struggles to prosper due to the fact of several constraints including minimal development research and fluctuating markets. Yield penalty due to the presence of drought and biotic stresses continue to be a major drawback for groundnut production. This review traces progress in the groundnut breeding that started in Burkina Faso before the country’s political independence in 1960 through to present times. Up to the 1980s, groundnut improvement was led by international research institutions such as IRHO (Institute of Oils and Oleaginous Research) and ICRISAT (International Crops Research Institute for the Semi-Arid Tropics). However, international breeding initiatives were not sufficient to establish a robust domestic groundnut breeding programme. This review also provides essential information about opportunities and challenges for groundnut research in Burkina Faso, emphasising the need for institutional attention to genetic improvement of the crop.

scholarly journals Why “Less is More” in Non-Financial Reporting Initiatives: Concrete Steps Towards Supporting Sustainability

2020 ◽  
Vol 10 (2) ◽  
Author(s):  
Georgina Tsagas ◽  
Charlotte Villiers
Keyword(s):  
Financial Reporting ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Integrated Reporting ◽  
Less Is More ◽  
Csr Reporting ◽  
Corporate Reporting ◽  
Long Run ◽  
The Individual ◽  
Key Aspects

AbstractCalls are repeatedly made on corporations to respond to the challenges facing the planet from a sustainable development perspective and governments take solace in the idea that corporations' transparency on their corporate activity in relation to sustainability through voluntary reporting is adequately addressing the problem. In practice, however, reporting is failing to deliver truly sustainable results. The article considers the following questions: how does the varied reporting landscape in the field of non-financial reporting impede the objectives of fostering corporations' sustainable practices and which initiative, among the options available, may best meet the sustainability objectives after a decluttering of the landscape takes place?The article argues that the varied corporate reporting landscape constitutes a key obstacle to fostering sustainable corporate behaviour, insofar as the flexible and please all approach followed in the context of corporate sustainability reporting offers little to no real incentive to companies to behave more sustainably and ultimately pleases none in the long run. The case made is that “less is more” in non-financial reporting initiatives and hence the article calls for a revision of key aspects of the European Non-Financial Reporting Directive, which, as is argued, is more likely to achieve the furtherance of sustainable corporate behaviour. Although the different reporting requirements offer the benefits of focussing on different corporate goals and activities, targeting different audiences and allowing for a level of flexibility that respects the individual risks to sustainability associated with each industry, the end result is a landscape that lacks overall consistency and comparability of measurements and accountabilities, making accountability more, rather than less, difficult to achieve.The article acknowledges the existence of several variances relating to the notion of sustainability per se, which continues to remain a contested concept and variances between companies and industries in relation to how each is operating sustainably or unsustainably respectively. Such variances have so far inhibited the legislator from easily outlining through tailored legislation the individual risks to global sustainability in an all-encompassing manner. The end product is a chaotic system of financial reporting, CSR reporting, non-financial reporting and integrated reporting and little progress to increase comparability and credibility in order for companies to be held accountable and to behave in ways that do not harm the planet. A “clean up” of the varied initiatives in the terrain of non-financial reporting is recommended.

Diffi cult Issues of Equity Accounting

Auditor ◽  
2021 ◽  
Vol 7 (1) ◽  
pp. 37-41
Author(s):  
N. Mislavskaya
Keyword(s):  
Financial Reporting ◽  
Reporting System ◽  
Professional Community ◽  
Financial Statements ◽  
Critical Assessment ◽  
Financial Reporting Standards ◽  
Theoretical Approaches ◽  
Diffi Cult ◽  
Fixed Assets ◽  
Mandatory Use

The article, based on a retrospective analysis of theoretical approaches to the concept of capital, examines the legality of its reflection in the accounting (financial) reporting system. The dilemma of an organization's choice of an accounting policy for the revaluation of fixed assets or the mandatory use of it, discussed today in the professional community, justifies the democratic approach used in international financial reporting standards in the author's reading. Critical assessment refers to the methodology for reflecting the revaluation results on accounting sets and in the forms of accounting (financial) statements.

Generating reports on the efficiency of the use of production resources in the corporate reporting system

2020 ◽  
pp. 18-26
Author(s):  
Mary Konstantinovna Dzhikia
Keyword(s):  
Reporting System ◽  
Market Price ◽  
Integrated Reporting ◽  
Production Potential ◽  
Corporate Reporting ◽  
Operating Profit ◽  
Manufactured Products ◽  
Monitoring Report ◽  
Management Report ◽  
Production Resources

This article discusses the issues of reporting the use of production potential in the corporate reporting system. Formed the requirements for corporate and integrated reporting organizations proposed reporting on effectiveness of using production resources: production and management report segment and consolidated management report segment information, operational monitoring report of the process of formation cost and market price for manufactured products; reports with the results of factor analysis of the use of material, labor and other types of production resources, a list of cost items is defined to assess margin income, operating profit and break-even of production.

scholarly journals Empirical Study on the Impact of Evaluation of Intangible Assets on the Market Value of the Listed Companies

2021 ◽  
Vol 24 (1) ◽  
pp. 84-101
Author(s):  
Cristina Gabriela Cosmulese ◽  
Marian Socoliuc ◽  
Marius-Sorin Ciubotariu ◽  
Veronica Grosu ◽  
Dorel Mateş
Keyword(s):  
Empirical Study ◽  
Financial Reporting ◽  
Intangible Assets ◽  
Market Value ◽  
Added Value ◽  
Manufacturing Companies ◽  
Integrated Reporting ◽  
Digital Revolution ◽  
Service Companies ◽  
The Impact

The accelerated pace of economic development, the digital revolution and the internationalization of business has meant for some entities the creation or acquisition of intangible assets (IA), which have become increasingly important for the economic prosperity and for determining the global value of a company, also becoming an important incentive in creating added value. The aim of this paper is focused on analyzing the impact of internally generated intangible assets on the market value of the companies. In order to achieve this aim, we conducted an empirical study involving a sample of 180 NASDAQ and NYSE listed entities between 2007 and 2016. The sample has obtained by applying the inclusion and exclusion criteria on the 500 large-capitalization companies (S&P 500 Index). Making use of regressive techniques, the authors undertook an econometrical model to test whether the impact of intangible assets on the market value of the entities increases when are provided complete, clear and easy-to-understand accounting information about the intangible assets value, which aid business to properly estimate corporate value ratio and reduce implicit bias, due to mainly taking into account those reported values when measuring an entity’s value. The results revealed an impact of the value of the reported and unreported IA on the market value of the entities, for manufacturing companies relative to service companies, which generates an added value on the capital market and implicates a close linkage of disclosure compliance and the associated industry sector. The proposed model can be an inspiration for the legislator to change the structure of financial reporting, or anticipated a valuable informational source for increasing the quality of integrated reporting of economic entities.

scholarly journals Financial statements as the main source of information on the enterprise activity

2021 ◽  
Vol 11/1 (-) ◽  
pp. 27-30
Author(s):  
Nina OVSIUK ◽  
Zhanna SHALIIEVSKA ◽  
Kateryna HULKO
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
International Standards ◽  
Foreign Banks ◽  
Practical Implementation ◽  
Economic Activities ◽  
Management Decisions ◽  
Economic Relations ◽  
Intelligent Technology ◽  
Transparency And Disclosure

The essence of effective management of each business entity depends primarily on transparency and disclosure of information about its financial and economic activities. The financial report itself covers all important information about the state of the enterprise and provides an opportunity to obtain financial status with it by the interested user for further analysis and decision-making on further activities. As a rule, investors of creditors, state bodies, representatives who are preparing in construction with the business entity are interested in financial reporting. In order to provide more detailed and informative financial reporting to users, it is necessary to compile it with international standards, which act as tools for globalization of the economy and contribute to the development of global economic relations. During 2020–2021, the activities of enterprises took place in extremely difficult conditions, which is why the pandemic significantly affected the financial reporting indicators. Today, there is an appropriate use of intelligent technology and computer technology in the formation of financial statements. Financial statements based on taxonomies of financial statements for IFRS are prepared and presented in a single electronic format using Extensible Business Reporting Language (XBRL). XBRL is a generally accepted international standard for presenting financial statements in accordance with IFRS in electronic form. With the help of IFRS, Ukrainian companies have more effectively solved the following tasks: attracting investments and loans from the world's largest companies and banks, the ability to service financing from foreign banks and other organizations; placement of shares on international stock exchanges; providing the company's management with reliable information for making management decisions, as well as evaluating their adoption. Thus, today the economy of Ukraine depends on the choice of IFRS as a conceptual basis for accounting and its practical implementation. After all, the financial statements are fully open to internal and external users to make informed management decisions regarding cooperation with the relevant entity.

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