Non-financial Indicators Research Articles

КОРПОРАТИВНАЯ СОЦИАЛЬНАЯ ОТВЕТСТВЕННОСТЬ КАК СТРАТЕГИЧЕСКИЙ ОРИЕНТИР БИЗНЕСА

The features of the implementation of the concept of socially responsible business behavior are considered, and the analysis of the main non-financial indicators of the activities of Russian Railways is carried out. Attention is focused on the need to address key tasks to improve the efficiency of corporate social responsibility.

ДОСЛІДЖЕННЯ ПРОБЛЕМ СИСТЕМАТИЗАЦІЇ РЕЗУЛЬТАТІВ АУДИТУ ТА ПОДАННЯ ПОКАЗНИКІВ В ІНТЕГРОВАНОМУ ЗВІТІ

In modern conditions, the interest of business management in the effectiveness of the organization of the audit of integrated reporting and settlement operations for decision-making in terms of business management has increased significantly. The value of internal audit of integrated reporting is important, because it is this audit helps to eliminate inaccuracies and errors in the formation of indicators of integrated reporting. However, there is a problem of systematization of control results and presentation of reliable conclusions of the auditor on financial and non-financial indicators of the integrated report. Therefore, it is necessary to conduct more detailed research to improve the audit documentation, which should be used by the auditor during the verification of settlements with debtors and creditors. Insufficient level of elaboration of the issue of documentary support for checking the calculations of agribusiness enterprises during the internal audit of integrated reporting revealed the problem of further systematization of internal audit results and presentation of a reliable auditor's report on financial and non-financial indicators of the integrated report. In the course of the research a system of documentation according to audit procedures in the part of settlement operations during the internal audit of integrated reporting was developed. The developed set of documents is characterized by a meaningful content in terms of the proposed classification groups of settlements with debtors and creditors and the associated risks, the design of which ensures the reliability of the audit. Forms of auditor's working documents on settlement operations have been developed, which contribute to the formation of information support of the effective and supply part of the audit report based on the results of the internal audit of integrated reporting in terms of calculations as an integrated object of accounting and reporting. The proposed documentation system focuses the auditor's attention on urgent issues of qualitative and quantitative risk assessment, the appropriateness of the choice of management methods and ways to optimize risks, which will facilitate effective management decisions for business development.

Multiview Graph Learning for Small‐ and Medium‐Sized Enterprises’ Credit Risk Assessment in Supply Chain Finance

In recent years, supply chain finance (SCF) is exploited to solve the financing difficulties of small‐ and medium‐sized enterprises (SMEs). SME credit risk assessment is a critical part in the SCF system. The diffusion of SME credit risk may cause serious consequences, leading the whole supply chain finance system unstable and insecure. Compared with traditional credit risk assessment models, the supply chain relationship, credit condition of SME, and core enterprises should all be considered to rate SME credit risk in SCF. Traditional methods mix all indicators from different index systems. They cannot give a quantitative result on how these index systems work. Furthermore, traditional credit risk assessment models are heavily dependent on the number of annotated SME data. However, it is implausible to accumulate enough credit risky SMEs in advance. In this paper, we propose an adaptive heterogenous multiview graph learning method to tackle the small sample size problem for SMEs’ credit risk forecasting. Three graphs are constructed by using indicators from supply chain operation, SME financial indicator, and nonfinancial indicator individually. All the graphs are integrated in an adaptive manner, providing a quantitative explanation on how the three parts cooperate. The experimental analysis shows that the proposed method has good performance for determining whether SME is risky or nonrisky in SCF. From the perspective of SCF, SME financing ability is still the main factor to determine the credit risk of SME.

СРАВНИТЕЛЬНЫЙ АНАЛИЗ МЕЖДУНАРОДНЫХ СТАНДАРТОВ В ОБЛАСТИ НЕФИНАНСОВОЙ ОТЧЕТНОСТИ И ПРАКТИКА ИХ ПРИМЕНЕНИЯ

This article discusses and analyzes the most popular standards of non-financial reporting, which has a significant impact on the transformation of the business environment. Already, domestic and foreign companies with a high level of responsibility are beginning to publish non-financial statements in addition to financial statements, which is an additional tool for communication with stakeholders and a new source of information about their activities. To date, reports of this type are clearly unregulated, there are no verification standards, however, there is already a positive trend and the active introduction of non-financial indicators in the regular reporting of companies.

Підходи до дослідження інтелектуального капіталу на основі вартісно орієнтованого управління

Чітка проєкція управління інтелектуальним капіталом з метою прирощення вартості в площину концепції вартісно орієнтованого управління актуалізує дослідження в цьому напрямі. Досліджено питання підходів до структуризації інтелектуального капіталу підприємства. Встановлено, що інформаційною базою для вартісно орієнтованого управління інтелектуальним капіталом є звітність підприємств, а точніше – інформація про нематеріальні активи підприємства. Уточнено, що відповідно до поділу інтелектуального капіталу на людський, структурний і клієнтський не всі з наданих підвидів відображаються в звітних даних. Обґрунтовано, що звітна інформація може бути представлена за допомогою як фінансових, так і нефінансових показників, тому аналізувати слід як фінансову звітність, так і управлінську, в якій може уточнюватися специфіка інтелектуального капіталу і його компонентів. Визначено чотири підходи до дослідження інтелектуального капіталу на основі концепції вартісно орієнтованого управління. А саме: 1) вартісно орієнтоване управління інтелектуальним капіталом; 2) оцінка (визначення) вартості інтелектуального капіталу; 3) управління вартістю інтелектуального капіталу; 4) інтелектуальний капітал як драйвер вартості підприємства. Запропоновано для подальших досліджень обирати проблематику вартісно-орієнтованого управління людським, структурним та клієнтським капіталом як складовими інтелектуального капіталу.

Modern features and tools to analyze the insolvency (bankruptcy) of organizations

Subject. The article considers the definition of specific methodological aspects, systematization of methodological approaches and substantiation of tools for the analysis of insolvency (bankruptcy) of economic entities, which enable to timely diagnose negative changes in organization’s financial condition, take measures to prevent unfavorable developments in the situation, and optimize the management impact on business stability. Objectives. The purpose is to determine methodological tools relevant to the analysis and forecast of organization’s insolvency (bankruptcy) to ensure their high quality, clarification of financial and non-financial indicators for deeper analysis, and objective conclusions regarding the financial prospects. Methods. The paper employs analysis and synthesis, detailing and generalization, comparison, abstraction, analogy, economic and mathematical modeling, systems and strategic approaches. Results. The paper shows signs and types of bankruptcy of economic entities, systematizes external and internal factors of organizations’ bankruptcy, includes the results of statistical analysis of economic entities’ bankruptcy in the Russian Federation, defines the methodological features of the analysis of insolvent organizations and its information base, generalizes methodological approaches and tools for analyzing the insolvency (bankruptcy), offers and underpins financial and non-financial indicators that are valuable for using in the framework of in-depth analysis and assessment of the likelihood of insolvency (bankruptcy). Conclusions. The proposals aim at increasing the validity of the organization’s assessment in terms of its compliance with the going concern principle, ensuring the adequate economic, legal and financial characteristics of the business, and formulating objective conclusions on possible bankruptcy and risks for stakeholders.

MODERN APPROACHES FOR INTEGRATED REPORTING PREPARING IN UKRAINE

In modern conditions, the possibilities of Accounting Reporting do not meet the tasks of contentment the information needs of users of accounting data, which are aimed at obtaining evidence of the stable and sustainable functioning of both the business entity and the region where it operates, and the state as a whole. The subject of the article is the different approaches to the preparation of integrated reporting and features of the formation of indicators. Integrated corporate reporting defines a single format for providing interested consumers with information about the company's activities, risks and potential for quality services, covers financial and non-financial reporting and discloses the effectiveness of economic, environmental and social activities of the company, ensuring transparency of information on business risks and management. At present, enterprises in Ukraine compile a report that combines financial indicators and indicators that characterize some important social aspects – Management Report. The paper considers the concept of cost reporting, the key idea of which is to achieve greater informativeness of accounting indicators through corporate reporting and the development of standards of non-financial information that reflects the industry specifics of the enterprise. The purpose of the work is a detailed consideration of the essence of integrated reporting, problems of its compilation, analysis of existing approaches to the formation of indicators of integrated reporting of different companies taking into account the needs of users, justification of indicators included in integrated reporting. The study used a set of methods and approaches, such as dialectical, synthesis and comparative, systemic. The article solves such tasks as analysis of functions and components of integrated reporting, analysis of the Management Report and indicators that form it, determining the features of its preparation by different companies, the basic principles of integrated reporting in accordance with the international standard of integrated reporting. The obtained results are a detailed analysis of the indicators of the management report and the introduction of prerequisites for the effective formation of such indicators. Conclusions: Further development of integrated reporting should focus on such important aspects as the development of a system of financial and non-financial indicators, methods of obtaining information, generalization of various management systems (management accounting, monitoring, analysis of financial stability) in the preparation of internal integrated reporting.

Changes in sustainable growth dynamics: The case of China and Russia gas industries

In this research, the authors try to find solutions for Russian and Chinese gas companies' sustainable growth. With the help of Lasso regression, linear regression and forecasting model, the authors define financial and non-financial indicators influence the Chinese and Russian gas companies' sustainable growth rate. Results indicate that the most influential nonfinancial factors for the Russian gas companies' sustainable growth rate are Energy Return on Investment and Return on Labor indicators while financial factors are the cost of the company, net working capital return on fixed assets, and debt-equity ratio. The situation is not the same for Chinese gas companies where the most significant non-financial factors are energy savings, return on ecological protection expenses and financial are a cost of the company, net profit growth, current ratio and earnings before interests and taxis. All three suggested scenarios for the Russian gas industry are quite positive with the most probable scenario having a 5–10% sustainable growth rate growth until 2030. There is a risk of descent in the level of the Chinese gas companies' sustainable rate if they would concern only financial questions. In another case, if China's gas companies choose the way to focus on energy efficiency, energy savings and environmental protection, the high level of the sustainable growth rate growth until 2030 would be observed as predicted by research calculations.

Influencing Factors of Equity Financing Efficiency of the Listed Companies in Strategic Emerging Industry Based on Baidu Index

In order to further improve the equity financing efficiency of listed companies in strategic emerging industries, this paper selects relevant data of 208 listed companies in strategic emerging industries from 2014 to 2018, and calculates the changes in scale efficiency, pure technical efficiency and total factor productivity through the Data envelopment analysis (DEA)-Malmquist model. Taking the three as representative variables of equity financing efficiency, at the same time, using the Tobit model to analyze the annual growth rate of selected 11 variables including asset-liability ratio, accounts receivable turnover rate and sub-industry network attention, and find out which variables that have a significant impact. The research results show that among the relevant annual growth rate variables, the degree of attention of sub-industry networks has a significant impact on the changes in the scale efficiency of equity financing of listed companies in strategic emerging industries, the changes in pure technical efficiency, and the changes in total factor productivity, among which the changes in scale efficiency The impact of is negative, but asset-liability ratio, return on assets, total assets, intangible assets, daily return volatility and top three executive compensation have no significant impact on the three; accounts receivable turnover rate, net profit. The growth rate only has a significant positive effect on the changes in the scale and efficiency of equity financing of listed companies in strategic emerging industries and the changes in total factor productivity, while the concentration of equity only has a significant negative effect on both; the two variables of comprehensive leverage and return on assets. The former only has a significant negative impact on changes in total factor productivity, while the latter only has a significant positive impact on changes in pure technical efficiency. The conclusion is: in addition to the common financial indicators and non-financial indicators, the big data indicators of Baidu Index have a prominent role in the factors affecting the equity financing efficiency of listed companies in strategic emerging industries.

Non-financial reporting by an international corporation in the light of new mandatory regulations

Purpose: Directive 2014/95/EU gave the EU Member States a certain flexibility when transposing it into national law. Each Member State could, therefore, decide to introduce regulations of varying degrees of stringency. Thus, the purpose of the article is: 1) to indicate the main differences in the implementation of the Directive and the national provisions in countries selected for the study; 2) to determine and compare the range of non-financial indicators published by branches of an international corporation that operates in the selected countries, after the introduction of changes to the reports; 3) to determine differences in the reporting of non-financial ratios existing between entities operating within one capital group in the EU and outside of it. Methodology/approach: Comparative analysis and content analysis were used to achieve the objectives of the article. Findings: The results suggest that countries should adopt into their national laws various items, including the definition of a large entity that is required to make non-financial disclosures, the need for external verification of this type of information, and the adoption of sanctions for failing to publish such information. The content analysis of individual branches’ non-financial reports also revealed a wide range of non-financial indicators. What is more, significant differ-ences were found between the scope of the non-financial indicators published by the capital group and those of its subsidiaries. Originality/value: To date, little research has been done on the impact of this regulation on the practice of non-financial reporting. Our research, therefore, expands the knowledge on the subject, despite the fact it does not cover a large number of enterprises. It constitutes a new approach to non-financial disclosure analysis since the study covers non-financial reports of a capital group and its subsidiaries that operate in different countries.

Editorial

Editorial

Studying the specifics of manipulation of financial statements in organizations of the construction sector

Subject. We identify the signs of manipulating the financial statements in the construction sector organizations. Objectives. We focus on developing the analytical procedures to detect the signs of financial statements manipulation, namely, the so-called window dressing. Methods. The methodological basis rests on general scientific principles and methods of research, like abstraction, generalization of approaches of domestic and foreign authors to the detection of manipulation of reporting, and statistical methods of information processing. Results. We developed a classification of methods for manipulation of unsound improvement of financial statements, assessed the likelihood of misstatement of financial statements, identified the elements of poor quality items, proposed a method to detect the manipulation of reporting, based on the comparison of substandard financial statement items with reliable items and/or non-financial indicators. We tested the methodology on the data of enterprises, operating in the construction sector. Conclusions. The study found that a likely manipulator is, usually, a micro-enterprise or a small company that does not have a credit limit, has significant relative performance of assets and liabilities of low quality, while showing high productivity and high return on assets at the average level of capital/labor ratio, and characterized by low investment and financial activity.

Effect of entrepreneurial orientation and strategic orientations on financial and nonfinancial performance of small and medium enterprises in Saudi Arabia

In today's competitive environment, small and medium enterprises (SMEs) need to be competitive and adopt innovative and strategic approaches to improve their performance. SMEs have been recognized as the main driver of competitiveness, fueling job opportunities and supporting economic development and growth, particularly in developing countries. The purpose of this paper is to investigate the joint effect of entrepreneurial orientation (EO), market orientation (MO), and technology orientation (TO) on financial and nonfinancial performance of SME in Saudi Arabia. In this study, the author has employed a quantitative research method. The study collected data from 206 owners/mangers of SMEs in KSA. The study has used partial least squares structural equation modeling (PLS-SEM) to analyze the research data. The results in this study show that five out of six hypotheses were accepted, indicating that EO, MO, and TO have a positive and significant effect on financial performance, as well as MO and TO have a positive and significant effect on nonfinancial performance. However, EO was found to have an insignificant effect on nonfinancial performance. The results suggest that SMEs need to evaluate their performance in terms of financial and nonfinancial indicators and understand how these measures relate to each other, which will aid in assess achievements and formulate SMEs strategies. This is the first study that adequately examines the joint effect of EO, MO, TO on financial and nonfinancial performance in developing economics, particularly in Saudi SMEs sector.

Strategic Management, Organizational Context and Firm Performance: A Critical Review of the Literature

Does strategic management have an effect on firm performance and is this affected by the organization’s context. This paper seeks to establish the current results of empirical studies on the relationship between strategic management, organizational context and firm performance. The anchoring theories for this review are Contingency Theory, Resource Based View, Dynamic Capabilities Theory and Industrial Organization Theory. From review of the Literature, a conceptual framework emerged, with strategic management as an independent variable, firm performance as a dependent variable, and organizational context as a moderating variable. The components of strategic management include objective setting, defining vision and mission, strategic analysis, strategy formulation and implementation and monitoring and evaluation. Firm performance factors are financial and non-financial indicators. Organizational context factors are public, private and others e.g. environmental factors. From the empirical review of the Literature it was noted that the unresolved issues include divergent views on the link between strategic planning, strategic management and firm performance as results of studies done have not had agreement on the nature of the relationship. It was further noted that there is need to empirically investigate the role of moderating variables e.g. organizational context in the relationship between strategic management and firm performance. The emerging propositions point to the need to ensure a close linkage between strategic management and on-going performance management. There is also a need for leaders to effectively implement strategy and manage performance.

Development of Public Non-financial Reporting of Economic Entities

The paper describes the main directions of public non-financial reporting development of economic entities. The main reason of disclosure non-financial indicators of an economic entity is to make the content more informative of the most significant of them for business. The research methodology, based on the methods of logical analysis, comparison and comparison, provides for the use of non-financial drivers of an economic entity, formed through an information system for a comprehensive assessment of its effectiveness. The result of the study is a proposal for a multi-factor approach to solving issues of sustainable development of economic entities. A comprehensive assessment of the economic entities performance should be based on the analysis of financial and non-financial reports that contributes the improvement of the information reliability about the activities of economic entities both in relation to their indicators in the medium and long term. Also, this concerns other fields of activity, taking into account the relationship and mutual influence of economic indicators. There have been formulated some recommendations regarding the information area of sustainable development of economic entities, which provides key stakeholders with timely and reliable information for developing ways of interaction. The research may be of interest to economic entities in the real economy sector in various fields of activity.

Management of financial and non-financial indicators of enterprise

Management of financial and non-financial indicators of enterprise

Ethics and ESG

This paper provides theories, models and practices to assist in understanding ethical decision making in relation to environmental, social and governance issues. It begins by defining sustainability and how it is measured and reported. The most influential is the UN’s definition of sustainability and its measurement by compliance with its 17 Sustainability goals. In his recent report into the finance sector, the Royal Commissioner was scathing in his assessment of the lack of integrity, honesty and ethics and endorsed the importance of reporting non-financial indicators of performance. However, there are few explanations of the links in the literature between ethics and ESG and how ethical decisions could be managed. The purpose of this paper is to address this issue by exploring the questions: What are: ethics? Business ethics? The main ethical theories? What is the relationship between ESG and ethics? What is the difference between ethics and morals? How do we apply ethical reasoning to ESG?

How to Measure Start-Up Success? A Systematic Review from a Multidimensional Perspective

This paper conducts a systematic literature review on the measurement of success in the context of start-up firms. Given the absence of an in-depth explanation of start-up success and its measurement, a conceptual framework and a sample of questions were provided to understand the term further. Defining and conceptualizing start-up success is deemed as a strategic management concept that helps to align business operations with the organizational goals. Even though the term sounds simple and insightful, the inconsistency of measurements and diverse definitions to delineate the success concept leads to misguided circumstances. Therefore, this paper aims to present the multidimensional concepts of success to represent distinct dimensions in evaluating start-up success. There are two main constructs to assess success namely; financial and non-financial indicators. Indeed, this paper critically demonstrates the extent to which these dimensions are significant to be addressed in future studies specifically in the context of start-up firms.

Social Responsibility, Communication and Financial Data of Hospitals: A Structural Modelling Approach in a Sustainability Scope

Health is one of the fundamental pillars of public management and should be one of the main objectives of any society that pursues true progress and well-being for its citizens. In recent years, the public health system has been seeking collaborative synergies with the private health system to achieve efficient functioning at the levels of care demand, waiting lists and financial pressure. For this reason, private entities in the hospital field must be analysed through the application of information systems comprised of financial and non-financial indicators. In this organizational context, economic and financial data, communication, and social responsibility are essential to correctly manage the performance of hospital companies. Drawing on stakeholder and dynamic capabilities theories, we have defined a conceptual model that proposes that a greater predisposition to social responsibility actions by hospitals could explain communication practices and economic and financial results. Thus, the main objective of this study is to determine the possible relationship between three important aspects in the management of hospital companies: social responsibility, communication, and economic and financial results. Partial least square technique was applied to estimate a structural equation model to analyse a sample of 122 hospitals operating in Spain. This paper also analyses how communication mediates the relationship between social responsibility and economic and financial results. The main results empirically validate a model that links and predicts the social responsibility actions undertaken by these companies, which are directly related to the business communication that is carried out and the economic and financial results. Related to the implications, managers could adopt strategies once they know that they will contribute to improve their relationships with stakeholders and shareholders.

Entegre Kurumsal Performans Değerlemesinde Çoklu Sermaye Temelli Bir Model Önerisi: Bankacilik Sektörü Uygulamasi (Integrated Corporate Performance Evaluation Model Proposal Based on Multiple Capitals: Evidence from the Banking Sector)

The main objective of this study is to develop a proposal for a model based on multiple capitals to evaluate integrated corporate performance. The study is unique in that it adds a new dimension to the capitals defined in the International Integrated Reporting Framework by adding governance capital. Another unique aspect of the study is that it provides a seven-dimensional analytical approach to the integrated corporate performance evaluation where not only financial but also non-financial indicators are based on direct quantitative data. In this study, using the data of deposit banks traded in the BIST Sustainability Index between 2014-2017, the indicators representing multiple capitals, including governance capital, are first determined by the Content Analysis method. In the second stage, all indicators are weighted in the example of the banking sector by the Entropy method. Then, corporate performance evaluation has been carried out using TOPSIS and Gray Relational Analysis methods. In the final stage, the relationship between the performance scores obtained and earnings per share has been investigated. As a result of the analyses, it is found that the intellectual capital dimension has the highest weight in the integrated corporate performance model valuation and a positive significant relationship is found between the integrated corporate performance scores achieved with the TOPSIS method and earnings per share. This study is a guideline in terms of identifying the highly representative indicators which are prominent in practice and the literature. The developed model is expected to support the decisions of all stakeholders, especially investors, by enabling a comparison between measuring the performance of corporations and the value creation processes.