A Model for Measuring the Usefulness of Financial Reporting and the Effectiveness of Its Application. The Case of Reporting Methodology of the Republic of Moldova.

Theoretical background: Financial statements, due to their verifiability, retain their importance as a fundamental accounting tool trusted by stakeholders. At the same time, the transition to a socio-economic development paradigm has dictated a demand for adhering to requirements which make the information useful for taking informed decisions, primarily those concerning responsible investing. In this regard, the challenge of measuring the usefulness of information requires an in-depth study. Purpose of the article: Consequently, the aim of this work is to develop a model for measuring the practicality of financial reporting based on the interpretation of qualitative characteristics and to substantiate the effectiveness of its application by any accounting system. Research methods: To achieve the objective, a research methodology has been developed, based on the methods of analysis, mathematical, and algorithmic modeling. The analysis method was employed to interpret the concept of qualitative characteristics of information, establishing a correlation between the information theory and the accounting methodology. The modeling method contributed to the development of a three-stage algorithm for choosing one of two modifications within the framework of the qualitative characteristics of information concept and the mechanism for measuring numerical values of information utility for different accounting models – European and Anglo-Saxon. Main findings: An algorithm has been developed for applying the criteria of the qualitative characteristics concept to choose one of its two modifications. The innovation of the study lies in the development of a stepby-step mechanism for determining the numerical value of information usefulness for various accounting systems. Information entropy coefficients have been established, and axiomatic boundaries of the values of the usefulness of financial reporting information have been calculated for different accounting models. The developed model for measuring the usefulness of financial reporting information has been adapted for international accounting systems and underscores the necessity of a creative approach when applying the qualitative characteristics concept to accounting systems situated between IFRS and the EU Directive. [ABSTRACT FROM AUTHOR]