Author: Dumisani Rumbidzai Muzira1
1Department of English, Faculty of Letters, Languages, and Arts, The University of Djillali Liabes, Sidi Bel Abbès, Algeria
Abstract:Investors having lost their investments due to misrepresentation of information in financial reports, there is need for continued research on what constitutes a quality financial report. A quality financial report should be able to meet its primary objective of providing relevant information for economic decision making (International Accounting Standard Board Framework). A conceptual framework on a quality financial report is then proposed. This paper therefore seeks to explain the concept of a quality financial report by identifying the financial report’s attributes, its antecedences and its outcomes. In order to be useful, the financial report should possess both fundamental and enhancing qualitative characteristics (International Accounting Standard Board Framework). Another attribute, mechanical presentation of the report is then added. The elements considered here being, readability, legibility and report length. The conceptual framework will guide the preparers of financial reports on what constitutes a quality financial report so as to improve their reporting. It will also help the users of financial reports in determining the quality of financial reports before using them for decision making. If this framework of a quality financial report is adopted, there might be a reduction of the occurrences of financial statements scandals and thereby restoring investor confidence in the financial reports.
Keywords: Stakeholder Theory, Stewardship Theory, Quality Financial Report, Readability, Legibility
Bach, L. T. (2016). The impact of financial statement disclosure on conservatism in financial reporting: Evidence from Vietnam. International Journal of Economics and Financial Issues, 6(6) 158-161.
Beest, F. V., Braam, G., & Boelens, S. (2009). Quality of financial reporting: Measuring qualitative characteristics. Nijmegen Center of Economics working Paper 09-108. Retrieved from http://www.ru.nl/nice/workingpapers
Chakroun, R.& Matoussi, H. (2012), Determinants of the extent of voluntary disclosure in the annual reports of the Tunisian firms. Accounting and Management Information Systems 11( 3), 335–370
Dobkowski-Joy, A., & Brockland, B. (2013). The state of integrated reporting: Innovation and experimentation in the merging of ESG and financial disclosure (The State of Integrated Reportingframework-llc.com). Retrieved fromhttp://framework-llc.com/wp-content/uploads/2013/03/FrameworkLLC
DuBay, W. H. (2004). The principles of readability. Retrieved from http://en.copian.ca/library/research/readab/readab.pdf
Dyczkowska, J. (2014). Assessment of quality of internet financial disclosures using a scoring system: A case of Polish stock issuers. Accounting and Management Information Systems, 13(1), 50-81
Eccles, R. G., & Saltzman, D. (2011). Achieving sustainability through integrated reporting. Stanford Social Innovation Review. Retrieved from http://environment.harvard.edu/sites/default/files/2011SU_Features_EcclesSaltzman.pdf
Ernst & Young. (2012). Now is the time to address disclosure overload. Retrieved from http://www.ey.com/Publication/vwLUAssets/ToThePoint_BB2367
Filipovic, A. L. (2012). Revised qualitative characteristic of financial statements as precondition for strengthening information power on capital market.
Economics and Organization 9(1), 81 – 92 retrieved from http://facta.junis.ni.ac.rs/eao/eao201201/eao201201-07.pdf
Kaya, T. C. (2013). Fair Value versus Historical Cost: Which is actually more “Fair”? The Journal of Accounting and Finance. Retrieved from http://www.journal.mufad.org/attachments/article/717/8.pdf
Kythreotis, A. (2014). Measurement of financial reporting quality based on IFRS conceptual framework’s fundamental qualitative characteristic. European Journal of Accounting, Finance and Business, 2(3), 4-29.
Habek, P. & Wokniak, R. (2015). Assessing the quality of corporate social responsibility reports: The case of reporting practices in selected European Union member states. Quality & Quantity, 50, 399-420.
IASB (2008). Exposure draft of an improved conceptual framework for financial reporting: The objective of financial reporting and qualitative characteristics of decision-useful financial reporting information. Retrieved from http://www.assb.gov.sg/docs/attachments/EDofChapters1and2theJointImprovedConceptualFramework.pdf
Nederpelt, P. V. (2011). Attributes of quality reports. Retrieved from http://www.oqrm.org/English/2011_Attributes_of_quality_reports.pdf
Radu-Dan, T. (2015). Integrated reporting: The next step ahead for a sustainability society. European Journal of Business Science and Technology, 1(1), 64-75. Retrieved from https://www.ejobsat.cz/wp-content/uploads/2015/10
Sherman, D. H. & Young, D. S. (2016). Where financial reporting still falls short. Harvard Business Review, July –August 2016 issue, pp. 76-84
Tang, Q. Chen, H. & Lin, Z (2016). How to measure country-level financial reporting quality? Journal of Financial Reporting and Accounting, 14 (2), 230-265
Thomas, W. C. (2002). The rise and fall of Enron: When a company looks too good to be true, it usually is. Journal of Accountancy. Retrieved from http://www
Wang, X. & Wu, M. (2011).The quality of financial reporting in China: An examination from an accounting restatement perspective. China Journal of Accounting Research, 4(4), 167–196
Wen, Q., Mong, S. E., Liu, L., Wise, V., Carey, P. (2015). Corporate governance and quality of forward-looking information Evidence from the Chinese stock market. Asian Review of Accounting 23 ( 1), 39-67
Yurisandi, T. & Puspitasari, E. (2015). Financial reporting quality-Before and after IFRS adoption using NiCE qualitative characteristics measurement. Paper presented at the 2nd Global Conference on Business and Social Sciences, Bali, Indonesia, September 17-18, 2015. Retrieved from http://ac.els-cdn.com
Zainudin, E. F., & Hashim, H. A. (2016). Detecting fraudulent financial reporting using financial ratio. Journal of Financial Reporting and Accounting, 14 (2).
International Journal of Social Sciences & Educational Studies
ISSN 2520-0968 (Online), ISSN 2409-1294 (Print), March 2019, Vol.5, No.3