Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/318764 
Authors: 
Year of Publication: 
2021
Citation: 
[Journal:] Business Systems Research (BSR) [ISSN:] 1847-9375 [Volume:] 12 [Issue:] 2 [Year:] 2021 [Pages:] 60-78
Publisher: 
Sciendo, Warsaw
Abstract: 
Background: Prior studies have revealed a disclosure problem in financial statements, primarily in narrative reports. Three main problem areas have been identified: insufficient relevant information, too much irrelevant information, and low-level communication. Micro and small entities face the most difficulties. Objectives: The main objective of this research is to propose a solution to existing disclosure problems to contribute towards improving the quality of financial reporting of smaller entities. Methods/Approach: To improve the reporting model for smaller entities, a survey has been conducted using a structured questionnaire on a sample of non-financial entities registered in Croatia. Based on results interpretations, standardized notes have been proposed. Results: 167 respondents have shared their thoughts about current disclosure issues and possible improvements, showing their awareness of disclosure problems and willingness for change. Given their opinions, the proposal has been made. Conclusions: The main contribution of the paper is the creation of a proposal for standardized, integrated, and digitalized notes to the financial statements based on the principle of materiality, primarily addressed to micro but also small entities from the non-financial sector. The paper extends previous proposals which did not focus on their structure and digitalization.
Subjects: 
disclosure problems
financial statements
notes
micro and small entities
standardization
integration
digitalization
the principle of materiality
JEL: 
D22
M19
M41
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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