A Quality Financial Report: Concept Paper

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.

Quality Of Financial Statement And The Factors That Influence It

“…Good quality and good financial reports are urgently needed. Various benefits of good quality financial reports, among others, can increase voluntary disclosure (Pangaribuan et al, 2022), provide benefits to stakeholders (Dumisani, 2019), have a positive future impact on company size and growth (Astutie and Fanani, 2016) as well as other positive impacts.…”

“…Financial Accounting Standards serve as a foundation for the process of creating financial reports, ensuring consistency in their presentation. Accounting standards also help users of financial statements understand and compare the financial accounts of various businesses, which in turn helps auditors (Dumisani, 2019). The use of accounting standards in the presentation of financial statements will provide comparability characteristics.…”

estudo dos aspectos relacionados à presença de ruídos no processo de elaboração da informação contábil: haveria a influência de heurísticas comportamentais?

“…Nesse contexto, os elaboradores das informações contábeis devem produzir relatórios que sejam relevantes para a tomada de decisões e representem fielmente a realidade, de forma imparcial, completa e livre de erros (Muzira, 2019). Assim, um relatório financeiro deve fornecer informações úteis acerca de uma determinada entidade, tendo um efeito significativo nas decisões econômicas dos agentes (Biddle, Hilary & Verdi, 2009;Cho & Kang, 2019).…”

A study of the aspects related to the presence of noise in the process of compiling accounting information: would there be the influence of behavioral heuristics?

“…In this context, accounting information makers should produce reports that are relevant to decision-making and faithfully represent reality, in an impartial, complete and error-free manner (Muzira, 2019). Thus, a financial report must provide useful information about a particular entity, having a significant effect on the economic decisions of the agents (Biddle, Hilary & Verdi, 2009;Cho & Kang, 2019).…”