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Enhancing quality of information through risk reporting in financial statements

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  • Nichita Mirela

    (The Bucharest University of Economic Studies, Bucharest, Romania)

Abstract

When we bring in discussion risk, we think about danger, loss or other unfavorable consequences. In accounting and in finance area, the concept of risk is related to a wide range of terms, such as: cost - volume analysis, decision trees, discounted cash flows, capital assets pricing models, and the newly hedging concept. Effective risk management relates to risk assessment; risk evaluation; risk treatment; and risk reporting. Risk management highlights the actions that the entity takes in order to be prepared for any negative event. The objective of risk management is not to prevent or eliminate taking risk, but is to ensure that the risks is taken with complete knowledge and clear understanding so that it can be measured to help in mitigation. The paper will emphasizes a short evolution about accounting qualitative characteristics and how these features may conduct to a more transparent reporting and a balanced risk management processes. A key principle of comprehensive risk management is risk transparency, both in terms of internal risk reporting as well as external disclosure for users of information in making decision process.

Suggested Citation

  • Nichita Mirela, 2018. "Enhancing quality of information through risk reporting in financial statements," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 12(1), pages 671-682, May.
    • Handle: RePEc:vrs:poicbe:v:12:y:2018:i:1:p:671-682:n:60
    DOI: 10.2478/picbe-2018-0060
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    References listed on IDEAS

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    Cited by:

    1. Agnieszka Judkowiak, 2021. "Disclosure Practices of Information in the Field of Financial Instruments: Evidence from Polish Companies Listed in the Warsaw Stock Exchange," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 468-493.

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