Non-Financial Reporting in Croatia: Current Trends Analysis and Future Perspectives

Abstract

Non-financial reporting forms part of corporate reporting. Among other, it includes disclosure of information regarding corporate social responsibility (csr)/sustainability issues and as such represent the supplement to the information provided by financial statements. Compared to the financial reporting, non-financial reporting is voluntary in majority of countries, including Croatia. Thus, companies decide on their own whether to disclose on this issue or not. Considering its voluntariness, the aim of this paper is to determine the current state of non-financial reporting in Croatia by identifying the financial characteristics of companies disclosing non-financial reports. In data analysis, the logistic regression was used. The research was conducted on a sample of Croatian publicly listed companies. Obtained results indicate that larger, more profitable and efficient companies are more probable to disclose non-financial reports, while indebtedness is not significant for it. In addition, further development of corporate social accounting is required, as well as promotion of non-financial reporting benefits.

Encompassing Non-Financial Reporting in A Coercive Framework for Enhancing Social Responsibility: Romanian Listed Companies’ Case

“…The significance of the results is validated by the R square coefficient value and the analysis of variance performed using the ANOVA test, which reveals each relationship's strength. Thus, the company's size has the strongest influence, followed by its performance and the sensitivity of the industry to which they belong, thus being in line with prior evidence (Duran and Rodrigo, 2018;Sierra-Garcia et al, 2018;Szadziewska et al, 2018;Galant and Cerne, 2017). Moreover, we also tested the robustness of the proposed model.…”

“…In this vein, we conducted the analysis according to the checklist proposed by Manes et al (2018) based on the requirements included in the European Union Guidelines 2017/C215/01 (hereafter EUG). Therefore, we used a dichotomous approach to quantify the information by attributing scores of "1" for the presence of the required element and "0" in case of absence (Venturelli et al, 2017;Gușe et al, 2016;Galant and Cerne, 2017). Consequently, we developed the non-financial information disclosure index (NFI) by dividing the number of elements disclosed in the annual report, required by the EUG, to the total number of elements.…”

“…In the second stage, for performing the regression analysis aimed to identify possible factors influencing transparency enacted through the EUD (RQ2), we selected the potential determinants of the NFI disclosure (dependent variable) according to prior studies conducted on a similar topic. Among the most analyzed factors influencing there are the company size (measured by the number of employees, total assets or market capitalization), profitability (measured by ROA/ROE), financial leverage, Tobin's Q, business sector, assurance, type of reporting (Szadziewska et al, 2018;Sierra-Garcia et al, 2018;Duran and Rodrigo, 2018;Venturelli et al, 2017;Galant and Cerne, 2017). A summary of the independent variables considered in this research comprising their definition, proxies and reference authors is presented in table no.…”

“…Thus, most researchers conducted an ex-ante analysis of the non-financial reporting and its determinants (Carini et al, 2018;Szadziewska et al, 2018;Dumitru et al, 2017;Galant and Cerne, 2017), while there are few ex-post evidences (Sierra-Garcia et al, 2018;Venturelli et al, 2017;Matuszak and Rozanska, 2017). For example, the quality of CSR disclosure in Polish-listed Companies in the light of EUD requirements (Matuszak and Rozanska, 2017), the compliance to the EU Guidelines 2017/C215/01 with the IIRF and the GRI 4 guidelines on the European companies (Manes-Rossi et al, 2018), the level of non-financial and diversity disclosure and the transposition of the EUD into Italian law (Venturelli et al, 2017) or the level of completeness of NFI and the expected impact of the EUD in oil and gas sector (Carini et al, 2018) and the clarity of reports published by organizations (containing elements related to bioeconomy) in Europe (Avram et al, 2018).…”

“…Szadziewska et al (2018);Sierra-Garcia et al (2018);Duran and Rodrigo (2018);Galant and Cerne (2017) EMPLThe natural logarithm of the total number of employees at the end of the fiscal yearVenturelli et al (2017); Galant and Cerne (-The ratio of the annual net income to the total assets at the year's endSzadziewska et al (2018);Duran and Rodrigo (2018);Galant and Cerne (2017) ROE Return on equity -The ratio of the annual net income to the stockholders' equity at the end…”