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The relations between the quality of financial statements and corporate governance

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  • Franczak Iwona

    (University of Economics in Katowice Faculty of Finance and Insurance, KatowicePoland)

Abstract

Business entities operated in the form of capital companies, to maintain reliability and transparency of the activities conducted, should observe general supervisory framework of legal nature. The primary objective of the information policy is to provide stock market participants with appropriate standards of company transparency which through the corporate governance regulations should lead to the improvement in the quality of financial reporting. Financial statements should be reliable as it is only then that their aims and targets are met, and the image of business they depict should be created according to the true and fair principle, invoking the responsibility of individuals supervising the process of drawing up a financial statement. The aim of the paper is to indicate the essence of the relationship between the quality of financial statements and the application of corporate governance principles. The paper uses the analysis of regulations and review of literature in the field of corporate governance and reporting of listed companies. The results of the analysis confirm that the quality of reported information determines the effectiveness of corporate supervision; that integrated reporting (IR) is a tool enabling organizations to communicate their value to investors; and that corporate supervision allows said organizations to adopt the comprehensive approach in developing sustainable value.

Suggested Citation

  • Franczak Iwona, 2019. "The relations between the quality of financial statements and corporate governance," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 55(2), pages 118-126, June.
    • Handle: RePEc:vrs:ijomae:v:55:y:2019:i:2:p:118-126:n:3
    DOI: 10.2478/ijme-2019-0009
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    References listed on IDEAS

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    1. Laura Sierra‐García & Ana Zorio‐Grima & María A. García‐Benau, 2015. "Stakeholder Engagement, Corporate Social Responsibility and Integrated Reporting: An Exploratory Study," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(5), pages 286-304, September.
    2. Julia Catharina Jensen & Nicola Berg, 2012. "Determinants of Traditional Sustainability Reporting Versus Integrated Reporting. An Institutionalist Approach," Business Strategy and the Environment, Wiley Blackwell, vol. 21(5), pages 299-316, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    corporate governance; information function of accounting; integrated report;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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