Transparent Reporting on Financial Assets as a Determinant of a Company’s Value—A Stakeholder’s Perspective during the SARS-CoV-2 Pandemic and beyond

Abstract

Background: Socio-economic changes prompt companies to disclose their sustainable development activities in the reporting, showing that they balance three capitals—economic, environmental, and social. On the other hand, while formulating strategies and goals, they consider the company’s widely understood environment, where its stakeholders are essential. As a result, the transparency and usefulness of the reported information are limited. Methods: The study employed financial statements’ content analysis and a statistical method (rank Spearman correlation, Shapiro–Wilk test). The percentage of change in critical areas for reporting transparency on financial assets was analyzed, before and during the SARS-CoV-2 pandemic. Results: The research indicated that the identified critical reporting areas concerning financial assets showed a greater value change during the pandemic. Correlations between the accounting value of the company and the same critical reporting areas were significant. Conclusion: It has been shown that larger companies can use more accounting policy instruments; therefore, the reporting transparency on financial assets is potentially lower for these companies. The transparency of the surveyed corporate reports during the pandemic was lower.

Assessment of the Application of Ifrs 9 Requirements by South African State-Owned Entities

“…Information that is not adequate, clear, and relevant may result in uncertainty surrounding the future of the business. Dratwińska-Kania et al (2023) confirm that reporting transparency is crucial for the value creation of an entity, especially tools applied in the policy for preparing financial statements.…”

Investor response to financial news in the digital transformation era: the impact of accounting disclosures and herding behavior as indirect effect

“…As a result, the majority of the scholars focus on evaluating quality of disclosure, accounting disclosure and earnings timeliness, disclosure and corporate governance and risk disclosure. In contrast, merely around 20% of papers discuss the effect of disclosures on investor reactions and behavioral finance, such as investor sentiments (Dratwi nska- Kania et al, 2023). Necessary corporate disclosure is important to avoid corporate issues such as the asymmetry of information between the stakeholders, agency problems between the stockholders and management, and it also mediates the corporate disclosures.…”

“…Necessary corporate disclosure is important to avoid corporate issues such as the asymmetry of information between the stakeholders, agency problems between the stockholders and management, and it also mediates the corporate disclosures. From the organizational point of view, the more it discloses the mandatory information to the public, the lower will be the asymmetry of data, allowing the market to predict future earnings variations better (Dratwińska-Kania et al , 2023).…”

“…Several studies suggest that companies can enhance investor confidence by improving their governance practices. This may result in improved CFADs and additional corporate reporting transparency, which in response may boost the liquidity and investments in emerging capital markets (Al-Okaily and Al-Okaily, 2022; Al-Okaily et al , 2023a, 2023b; Dratwińska-Kania et al , 2023). Many parties and stakeholders depend on corporate governance, including investors, brokers, officials, creditors, clients and employees.…”

“…Many parties and stakeholders depend on corporate governance, including investors, brokers, officials, creditors, clients and employees. According to literature, a “disclosure” is the release of information by firms of financial or nonfinancial in nature, quantitative or nonnumerical with regard to data, discretionary or mandatory to their individual stakeholders or the institutional stakeholders through official or nonofficial communication means (Al-Okaily et al , 2023a, 2023b; Dratwińska-Kania et al , 2023).…”