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Financial Communication And Intellectual Capital Reporting Practices

Author

Listed:
  • BELENESI (BUMBA) MARIOARA

    (Department of Finance-Accounting, Faculty of Economic Sciences, University of Oradea, Romania, 1st December 1918†University of Alba Iulia, Romania, PhD student)

  • POPA DORINA

    (Department of Finance-Accounting, Faculty of Economic Sciences, University of Oradea, Romania,)

  • CHIRA (CHIŞ) ANCA OANA

    (1st December 1918†University of Alba Iulia, Romania, PhD student,)

  • AVRAM (BOITOŞ) CAMELIA

    (1st December 1918†University of Alba Iulia, Romania, PhD student,)

Abstract

In a highly competitive economy, driven by globalization, the abundance of digital information and communication facilities, the investor directs its capital to those companies that promise added value of the invested capital. Even so, companies seek to obtain favorable terms of financing by rendering sensitive the investors. To achieve their goal, they must provide information about their financial and non financial performance with sufficient regularity to meet the information needs of actual or potential capital bidders in decision making. Financial communication through standardized annual statements of financial reporting in the context of corporate governance is no longer sufficient. The organization has more resources than those included in its balance sheet, capable of attracting huge benefits, but which do not meet the criteria for recognition in the financial statements. It requires, therefore, a voluntary disclosure of information on intangible resources, which are key factors in creating future value for both the organization itself and the industry it is part of. The reports of intellectual capital can effectively complement the shortcomings of the traditional model of accounting and financial reporting. In our paper we wanted to analyze financial communication in the context of corporate governance, presented through financial statements, reaching the intellectual capital reporting practices, as a means to improve communication of the organization with the outside. In this sense we presented two examples of good practice of two service companies (consultancy and design) that publish annually intellectual capital reports. To alleviate the negative consequences of non-recognition of intangible assets in the financial statements, we are for the voluntary disclosure of information on intangible assets in the intellectual capital reports, annual reports, those regarding corporate responsibility, or at least in the explanatory notes of the financial statements.

Suggested Citation

  • Belenesi (Bumba) Marioara & Popa Dorina & Chira (Chiş) Anca Oana & Avram (Boitoş) Camelia, 2014. "Financial Communication And Intellectual Capital Reporting Practices," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 563-572, July.
    • Handle: RePEc:ora:journl:v:1:y:2014:i:1:p:563-572
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    References listed on IDEAS

    as
    1. Gheorghe HOLT & Alina HOLT, 2010. "Intellectual Capital - Hidden Fortune not Reflected in Financial Statements," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 161-170, November.
    2. Lawrence D. Brown & Arianna Spina Pinello, 2007. "To What Extent Does the Financial Reporting Process Curb Earnings Surprise Games?," Journal of Accounting Research, Wiley Blackwell, vol. 45(5), pages 947-981, December.
    3. Burja Camelia, 2012. "Human Capital'S Impact On The Performance Of Romanian Knowledge Based Companies," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 337-342, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    financial communication; corporate governance; stakeholders; intellectual capital reporting; good practices;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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