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Qualitative Characteristics of Financial Reporting: An Evaluation According to the Albanian Users’ Perception

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  • Albana Gjoni-Karameta
  • Elona Fejzaj
  • Ahmad Mlouk
  • Kristina Sila

Abstract

The last 20 years’ changes in accounting has led to an essential review process of national accounting standards due to the main objective of improving financial reporting information for stakeholders. Financial reporting as a communication tool has become extremely important for appropriate decision making to economic reporting entities and also financial information users such as analysts, creditors, managers, auditors and government agencies in Albania and all over the world. The absence of a generally accepted definition for qualitative financial reporting has created a gap for continuous research on this matter. The main objective of this study is to examine users’ perception of qualitative financial reporting, toward their perceptions of some selected qualitative characteristics of financial statements. This study aims to determine the attitudes of financial statements’ users toward the importance of qualitative characteristics of financial information reported on these published financial statements. The chosen qualitative characteristics were relevance, faithful representation, comparability, timeliness, verifiability and understandability. An opinion survey was conducted on three hundred external users of financial statements, such as managers, bank officers, financial analysts, government officers and auditors. Each single characteristic has been operationalized using a structured questionnaire, and a five point Likert type scale was used. Selection process of qualitative characteristics of reported financial information will be based on the data taken from conceptual framework of international financial reporting standards published by the International Accounting Standards Board in a continuous process of improving financial reporting. This research examined primary data taken through an opinion survey directed to three hundred daily users of financial statements ‘information, reported by economic entities in Albania. Results of the study show a very strong positive correlation between users ‘perception and qualitative characteristic of faithful representation, a relatively strong positive correlation with relevance, comparability and understandability, and a moderate correlation with timeliness and verifiability. Users of financial reporting in Albania generally have a very positive attitude towards the qualitative characteristics of financial reporting.

Suggested Citation

  • Albana Gjoni-Karameta & Elona Fejzaj & Ahmad Mlouk & Kristina Sila, 2021. "Qualitative Characteristics of Financial Reporting: An Evaluation According to the Albanian Users’ Perception," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 10, November.
    • Handle: RePEc:bjz:ajisjr:2139
    DOI: https://doi.org/10.36941/ajis-2021-0151
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    References listed on IDEAS

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    1. Kazeem Akanfe Soyinka & Michael Omotayo Fagbayimu & Emmanuel Adegoroye & John Oladipo Ogunmola, 2017. "Decision Usefulness and Financial Reporting: The General Public Perspective," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(4), pages 160-168, October.
    2. Ahmed Al-dmour & Maysem F. Abbod & Hani H. Al-dmour, 2017. "Qualitative Characteristics of Financial Reporting and Non-Financial Business Performance," International Journal of Corporate Finance and Accounting (IJCFA), IGI Global, vol. 4(2), pages 1-22, July.
    3. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 77-104, September.
    4. Alexios KYTHREOTIS, 2014. "Measurement Of Financial Reporting Quality Based On Ifrs Conceptual Framework’S Fundamental Qualitative Characteristics," European Journal of Accounting, Finance & Business, "Stefan cel Mare" University of Suceava, Romania - Faculty of Economics and Public Administration, West University of Timisoara, Romania - Faculty of Economics and Business Administration, vol. 2(3), pages 4-29, October.
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