Disclosure of non-financial information in corporate accounting reports: a theoretical aspect

Abstract

The corporate world is changing as a result of the expansion and social deepening of globalization processes. To be successful, companies need to be aware of international markets, a diverse range of stakeholders, and comply with ever-increasing non-financial disclosure requirements. Organizations should also analyze how their social and environmental impacts affect their stakeholders and, most importantly,the financial situation of their shareholders. Globalization continues to influence corporate governance reform and its structure in order to be able to respond to growing demand. A hallmark of this reform is corporate accountability and transparency. This has put tremendous pressure on companies to disclose non-financial information and, more specifically,social and environmental issues because they are critical to the survival of the firm. Organizations have voluntarily responded to this pressure, but there is a need for regulatory principles that would form the basis for disclosure of non-financial information in the organization. In this article, the author analyzes various aspects related to the disclosure of non-financial information in corporate accounting reports. The reason why non-financial disclosure is required is because users of the financial report, including employees, suppliers, management, shareholders, financial analyst, creditors, and the government, need these reports to make decisions. Thus, it is very important that published annual reports contain reliable information that is timely to enhance decision making.