Do Croatian Companies Recognize Benefits of Integrated Reporting?

Abstract

Timely access to information and business transparency make the foundation for business success. Companies present their financial position and financial performance through the financial statements. As a financial information is not the only relevant factor of business value creation, presentation of non-financial information brings added value to different stakeholders. For the purpose of more transparent business operations and international comparability of the presented data, it is especially important that reports are compiled according to internationally accepted rules. The paper has sought to investigate whether Croatian companies recognize benefits of integrated reporting. The aim of the paper was to identify whether and to what extent largest companies in Croatia present the information regarding their intellectual capital, principle customers, business partners, environmental considerations, future plans, investments, market conditions, and further expectations of business development. Based on the research results, suggestions for improvement of the non-financial reporting in Croatia have been given.

Non-financial reporting in selected European countries

“…In order to evaluate the effect of a formal obligation for certain companies to disclose non-financial information within their management report, annual report or other kind of reports, several studies have been observed in Croatia. Dečman and Rep (2018) conducted an empirical research on non-financial information disclosures on a sample of Croatian largest companies for FY 2016 (before the legislation amendments). The overall conclusion was that there was room for improvement of non-financial information disclosures since Croatian companies still did not fully recognize the benefits of integrated (financial and non-financial) reporting.…”