An Analysis on Emerging Capital Markets and Globalization: Corporate Financial Reporting Practices |
Financial reporting is done by every business and organization to assessits financial performance. It is an indicator of how well or poor a company hasperformed in a particular financial year. Financial reporting involvespreparation of financial reports or financial statements and then studying theoverall performance of a company. Financial reporting may be defined ascommunication of published financial statements & related information froma business enterprise to third parties (external users) including shareholders,creditors, customers’ governmental authorities & the public. It is thereporting of the accounting information of an entity (individual, firm,company, government enterprise) to a user or group of users. A sound corporatefinancial reporting system is the cornerstone of a well-functioning marketeconomy and the bedrock of a healthy financial system. Financial reports are intended to meet the needs of decision makers.Accordingly, timeliness is identified as one of the characteristics ofinformation in financial reporting. To accomplish this objective, financialreports must be available on time to inform decision making. Therefore,financial reports should be published as soon as possible after the end of theaccounting period. This study reveals that the establishment of the Indian Stock Exchangeand the introduction of new accounting regulations in India did not altersignificantly the accounting measurement methods used by the companies. Whilemandatory disclosure declined, overall disclosure, voluntary disclosure and, ina large measure, the disclosure of categories of information increased over theten years. Firm size and listing status were found to be significantlypositively associated with overall disclosure and voluntary disclosure.Accounting regulation was significantly positively associated with overalldisclosure, but not mandatory disclosure.