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Traditional financial reporting primarily discloses information about assets, equity, liabilities and financial situation of an enterprise. Simultaneously, socio-economic changes are prompting enterprises to implement business reporting towards disclosing activities for sustainable development and information about the business model in non-financial reporting. Shaping of an enterprise’s business model is carried out in the spirit of sustainable development, which is beginning to dominate the strategies of many large enterprises. At the same time, the concept of the business model and its reporting have still not been characterized in detail or standardized, which limits transparency and the usefulness of information. These phenomena provided an incentive to undertake the research on the business model reporting. The overall goal of this study is to expand research on disclosures about the business model in the corporate reporting of Polish listed companies, as well as to indicate the degree and directions of development of this subject against the background of the accounting system. The study also addresses the epistemological goal by entering the discussion on reporting about the business model. The research uses the financial statement content analysis method and the statistical method (Spearman’s correlation). The scope of disclosures about the business model are examined in integrated reports, consolidated reports, management reports, non-financial data reports and CSR reports of Polish companies listed on the stock market. This information is examined according to its four main components: inputs, business activities, outputs and outcomes. The correlation between the number of audited disclosures and selected economic and similar parameters characterizing enterprises (total assets, performance, board, EBITda, equity and liabilities) is also studied. The research reveals that entities preparing an integrated report demonstrate a greater number of disclosures of business model components in selected economic categories than entities that do not prepare such a report. Thus, the companies preparing an integrated report follow the mainstream of stakeholder theory, opting for a more descriptive reporting approach, accessible to a wider group of users. Moreover, business model information is often reported in a highly random manner. Simultaneously, descriptive forms of business model disclosure prevail over numerical ones, although not to a large degree. The findings also confirm that there is a positive correlation between the detail of disclosures about the business model and selected economic parameters of an enterprise (the strongest with total assets, board and EBITda). Thus, it becomes possible to recognize that large enterprises with a strong and stable structure of assets follow specific, more detailed reporting patterns aimed at sustainable development of reporting. At the same time, they are more likely to expand the scope of disclosures compared to smaller enterprises. This investigation responds to the interest of enterprises and other stakeholders in the reporting spectrum by increasing market information efficiency and transparency. Findings can also be used by standards setters, while providing new rules and regulations.

Purpose: The main purpose of this article is to study the IFRS implications of COVID-19 for selected travel and leisure companies listed on the JSE. The article investigates how these selected companies disclose financial information regarding the going concern, or in other words, the sustainability of the company, revenue of the company, how the companies made estimations, and more, to account for the impact of the coronavirus pandemic on their financial information. Design/methodology/approach: content analysis was used to analyse the financial statements of ten travel and leisure companies listed on the JSE. This analysis indicated what additional disclosures these companies have in the light of COVID-19. Findings: even though there is no specific IFRS standard providing guidance on the impact of COVID-19, the findings reveal that the companies took utmost care in disclosing information and the impact of COVID-19 in the financial statements. Companies cautiously considered the impact of the coronavirus on their financial results and provided the users of these financial statements with transparent financial information, regarding going concern and sustainability of the company, revenue, estimations, and more. Originality/value: a new economic crisis, different from any other economic crises, emerged as a result of COVID-19 and the IFRS implications such as, the effect on sustainability and going concern, impact on revenue of companies, financial estimations during the coronavirus pandemic, the effect of COVID-19 on the financial subsequent events and other financial statement disclosures is still unclear. This study is deemed of vital importance as the users of financial statements require all the necessary information about how COVID-19 has affected these companies, and whether or not these companies will be sustainable in the foreseeable future, as to enable the financial statement users to make informed financial decisions.

Identifying fraudulent financial statements is important in open innovation to help users analyze financial statements and make investment decisions. It also helps users be aware of the occurrence of fraud in financial statements by considering the associated pattern. This study aimed to find associated fraud patterns in financial ratios from financial statements on the Stock Exchange of Thailand using discretization of the financial ratios and frequent pattern growth (FP-Growth) association rule mining to find associated patterns. We found nine associated patterns in financial ratios related to fraudulent financial statements. This study is different from others that have analyzed the occurrence of fraud by using mathematics for each financial item. Moreover, this study discovered six financial items related to fraud: (1) gross profit, (2) primary business income, (3) ratio of primary business income to total assets, (4) ratio of capitals and reserves to total debt, (5) ratio of long-term debt to total capital and reserves, and (6) ratio of accounts receivable to primary business income. The three other financial items that were different from other studies to be focused on were (1) ratio of gross profit to primary business profit, (2) ratio of long-term debt to total assets, and (3) total assets.

This paper studies the relationship between blockholder dispersion and the informativeness of earnings using a sample of Korean companies. Investors prefer less volatile and more sustainable earnings and managers have incentives to manage earnings to meet investor demand. We show evidence that firms with dispersed ownership, which are likely to suffer from high levels of information asymmetry, smooth earnings in order to relieve investors&rsquo, concerns regarding information asymmetry. Furthermore, our regression analyses on the relation between returns and future earnings reveal that earnings smoothing conducted by firms with dispersed ownership leads to higher informativeness of earnings. This study provides important implications for various financial statement users in interpreting firms&rsquo, earnings sustainability, especially in the East Asian countries where a wide spectrum of ownership concentration structure exists.

As an effective substitute for bank credit to ease financing constraints, trade credit plays an important role in the operation and growth of enterprises. This paper extends the literature by providing evidence on the relationship between trade credit financing and firm-level sustainable growth. Using the financial statement data of 20,089 Chinese A-share listed firms over the period 2003 to 2017, running a regression using the cross-section regression method and employing the two-stage instrumental-variable regression method in the endogeneity test, the study finds that trade credit has an overall positive and significant impact on the sustainable growth of Chinese firms, especially for firms with higher internal control ability, trade credit financing contributes more to sustainable growth, and the same way with private enterprises, whose growth depends more on trade credit compared to state-owned firms. We further find that the link between trade credit financing and sustainable growth of a firm is stronger in areas with lower access to finance, suggesting that firms with higher dependence on trade credit financing exhibit higher rates of sustainable growth in areas with weaker financial institutions.

The European Insurance and Occupational Pensions Authority suggests that as the coronavirus disease 2019 (COVID-19) pandemic has caused significant disruption to the economy, businesses, and people’s lives, national supervisory authorities should mitigate the pandemic’s impact on the European insurance sector. The functioning of insurance companies is in danger as they must balance a drastic increase in the number of claims with their capital and solvency stability. In this study, we evaluate the effects of the COVID-19 pandemic on insurance companies using European insurance companies’ financial statement data from 2010 to 2020. The results unambiguously demonstrate that the pandemic has negatively affected the functioning of the insurance sector. In particular, the return on assets decreased in German and Italian insurance companies during the pandemic. Furthermore, the solvency ratio decreased in the Belgian, French, and German insurance sectors. Conversely, the Polish insurance sector was unaffected. Moreover, we did not find any effects on the Z-score ratio in our sample. Lastly, the value of receivables owed to Belgian insurance companies increased. Based on this evidence, we argue that European legislators should discuss how to manage the probable financial problems of insurance companies during the COVID-19 pandemic.

This study examined the relationship between target firms’ financial statement comparability and bidder firms’ boundary decisions. The study used initial public offering (IPO) firms as target firms to test the impact of asymmetric information and signaling on investing bidder firms’ boundary decisions, such as joint ventures or acquisitions. In the IPO market, as an experimental setting, bidder firms are unfamiliar with issuing firms because they have little information about them prior to the IPO. This study argues that IPO firms with higher accounting comparability show lower information asymmetry. Consistent with this argument, we found that IPO firms’ accounting comparability has a positive probability of becoming a target for either a joint venture or acquisition, or an acquisition instead of a joint venture. This study contributes to the literature, financial statement comparability, and joint venture and acquisition decisions to measure the degree to which information asymmetry affects corporate investment strategy using a unique experimental setting of IPO firms.

This research aims to determine the influence of the independent commissioners, audit committee, institutional ownership, firm size andleverageagainst the integrity of the financial reporting information.This research is quantitative research with the causal approach.This study uses secondary data and panel data regression analysis method. The research results prove that audit committee, institutional ownership andleverageeffect on the integrity of the financial reporting information.But it does not prove that the independent commissioner and firm size effect on the integrity of the financial reporting information.

Trust relations are essential for effective interchanges in the financial markets. Investors (trustors), as well as other market participants, can only trust financial markets if they trust their auditors (trustees). In particular, the auditors&rsquo, assessment of the client&rsquo, s financial condition and its ability to continue as a going concern is paramount to improving social capital and maintaining sustainable financial markets. Research shows that a going concern opinion may have immediate consequences for both the auditing profession and financial statement users. We use the Throughput Model to illustrate how different trust positions are aligned with a particular auditor&rsquo, s decision-making pathway to enhance trust, distrust or no trust from the point of view of investors&rsquo, and creditors&rsquo

Identifying financial statement fraud activities is very important for the sustainable development of a socio-economy, especially in China&rsquo, s emerging capital market. Although many scholars have paid attention to fraud detection in recent years, they have rarely focused on both financial and non-financial predictors by using a multi-analytic approach. The present study detected financial statement fraud activities based on 17 financial and 7 non-financial variables by using six data mining techniques including support vector machine (SVM), classification and regression tree (CART), back propagation neural network (BP-NN), logistic regression (LR), Bayes classifier (Bayes) and K-nearest neighbor (KNN). Specifically, the research period was from 2008 to 2017 and the sample is companies listed on the Shanghai stock exchange and Shenzhen stock exchange, with a total of 536 companies of which 134 companies were allegedly involved in fraud. The stepwise regression and principal component analysis (PCA) were also adopted for reducing variable dimensionality. The experimental results show that the SVM data mining technique has the highest accuracy across all conditions, and after using stepwise regression, 13 significant variables were screened and the classification accuracy of almost all data mining techniques was improved. However, the first 16 principal components transformed by PCA did not yield better classification results. Therefore, the combination of SVM and the stepwise regression dimensionality reduction method was found to be a good model for detecting fraudulent financial statements.

The comprehensive income statement was adopted as the standard type of financial statement in 2011, and other comprehensive income (OCI) was included in the text of the financial statements. While OCI (unrealized income) is less sustainable than net income, it can help to assess a firm&rsquo, s value. Therefore, testing the usefulness of OCI is important in analyzing whether persistence of earning information affects a firm&rsquo, s value. The text of the financial statements enables market participants to access not only the realized net income (operating income, non-operating income), but also information on comprehensive income, which has not yet been realized. Although levels of realized and unrealized income indicate an increase in net worth, changes in realized and unrealized income differ in terms of uncertainty, it is, therefore, more important for market participants to judge information&rsquo, s usefulness. This study examines whether OCI increases earnings response coefficients (ERC). We analyzed the information content of OCI before and after international financial reporting standards (IFRS) to verify whether the information content varies as the format of OCI reporting changes from a footnote to the main text of the financial statement. In addition, we analyzed dividing OCI into positive OCI and negative OCI. The analysis showed that under the condition in which the realized income is constant, OCI (which is unrealized earnings) has additional information effects. This means that differences might be observed in the decision-making process depending on whether or not the OCI information is used.

In this paper, we examine whether the readability of different types of corporate risk disclosures influences the risk judgments of nonprofessional investors. Our study contributes evidence to the Security and Exchange Commission's ongoing initiative to improve corporate financial statement disclosures. Using 359 responses from an experimental survey of nonprofessional investors (NPIs), we find that readability, in conjunction with risk factor type, significantly influences investors' judgments of probability and size of economic loss, cause for worry, and overall risk. NPIs judged the risk from an industry-related risk factor (competition) to be higher when written in plain English, but judged the risk of a company-specific risk factor (internal control weakness over financial reporting) to be higher when written in a less readable format (i.e., legalese). We found no significant differences in judgments between plain English and less readable language on a combined industry/company risk factor, information security. Results suggest that a move to plain English for all types of risk factors may have consequences that are not fully understood or expected. This area needs further research before regulators enact (or enforce) mandates for risk factors to be presented in plain English.

Is it possible to quantify the information content of financial statements? If possible, then how? This study examines accounting as a classical communication system with the purpose of providing a framework with which to approach these fundamentally important questions. Information theory was established in the early-mid 20th century to describe the properties of classical communication systems. Applying concepts from this theory to an accounting context provides insight into the questions asked above. Specifically, a measure of the information content of a message in general and the financial statements in particular is developed from information theory concepts which originated with Claude Shannon -- the father of modern information theory -- in the 1940's. The measure is able to extract information contained in the financial statement numbers to predict firm performance despite the fact the numbers themselves do not easily admit insight. Thus, there seems to be "hidden'' information in the numbers that the measure captures which, in hindsight, helps predict firm price movements. Specifically, as a validity check, I provide evidence that the measure alone explains 10% of the variation in returns for a cross-section of firms.