Information Disclosure Requirements Research Articles

Subjective-objective standard of the director’s behavior

The article examines the standard of behavior of a director, with which the behavior of a director held liable for causing losses to a legal entity is compared. By drawing on comparative legal material (England, USA, France, and Germany), analysis of Russian legislation and judicial practice, it was concluded that the courts strive to introduce a subjective component even into a standard that is formulated at the legislative level as objective. This is explained by the activities of the director in the business environment, which now is impossible to fully understand and identify all cause-and-effect relationships (unlike the activities of other persons in relation to whom a special regime of liability has been established – medical workers, notaries, attorneys, appraisers). A set of measures is proposed (specification of the agreement with the director, exclusion of liability in crisis situations under the agreement, “nudging” to the standard at the level of judicial practice and best practices of corporate governance, use of information disclosure and qualification requirements), which will clarify and balance the standard of conduct of the director.

Sharia-compliant financial statements: Specifics of information disclosure

Subject. This article deals with the issues related to the disclosure of information in the financial statements by organizations providing partnership financing services. Objectives. The article aims to study the features of the Islamic model of accounting, its regulatory framework and the requirements for disclosure of information in financial statements in accordance with AAOIFI standards. Methods. The scientific works by contemporary foreign and domestic scientists engaged in the study of the Islamic model of accounting and the problems of disclosure of information in financial statements by Islamic financial institutions served as a methodological basis for the study. Results. The article finds that religion and ethical standards embedded in Islamic economics have a significant impact on accounting and the formation of Sharia-compliant financial statements. The article also describes the emergence and development of the Islamic accounting model and the distinctive features of information disclosure in accordance with RAS, IFRS and AAOIFI standards. The article provides examples of information disclosure in financial statements by Islamic financial institutions operating abroad and in Russia. Conclusions. The information disclosed in the financial statements of Islamic financial institutions in accordance with AAOIFI standards is much broader than under RAS and IFRS. The specifics of reflecting transactions on partnership financing are currently traced in the financial statements of companies operating in foreign countries, where partnership finance has been developing for many years. Financial institutions operating in the field of partnership finance in Russia prepare accounting (financial) statements in accordance with RAS, and when preparing internal management reporting, they are guided by IFRS and AAOIFI standards.

SECTORAL ANALYSIS OF PRINCIPLE 2 OF BRSR FILINGS

There is a growing global demand from investors for more rigorous regulations regarding non-financial disclosures. Internationally, several ESG reporting frameworks, such as the Global Reporting Initiative (GRI) , Carbon Disclosure Project (CDP) , Sustainability Accounting Standards Board (SASB) , and the Taskforce on Climate-related Financial Disclosures (TCFD) , have been established. These frameworks require companies to report on their sustainability performance, underlying principles, processes, and key performance indicators. The International Sustainability Standards Board (ISSB) has issued a global baseline for sustainability reporting in 2023 as IFRS S1(General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) .

Актуальные вопросы регулирования и раскрытия информации об устойчивом развитии в отчетности организаций

The article highlights the current regulation and sustainability and disclosure issues related to sustainability development. Analyze the recently released IFRS standards on sustainability disclosures — IFRS S1 «General Requirements for Disclosure of Sustainability-related Financial Information» and S2 «Climate-related Disclosures». Highlight the main stakeholder requests for climate risk disclosure in reporting.

Case Study of Enterprise Value Assessment

Along with the gradual advancement of the deepening reform of our country's socialist market economy and the further optimization of resource allocation, the restructuring, investment, acquisition and merger of enterprises are becoming increasingly frequent economic activities. The evaluation of the value of the target enterprise is one of the important links. This paper takes the small household appliance industry as the starting point, takes the small B Electric Appliance Co., Ltd. as an example, and uses the discounted free cash flow model in the income method to estimate its market value. It can reflect that this method is conducive to providing detailed and solid basis for value assessment relatively comprehensively from the aspects of enterprise profitability, profit quality, future profit sustainability, expected rate of return of the industry in which it is located, and time cost of funds, etc., and is widely used in the capital financial market and market information disclosure requirements.

Global investor responses to the International Sustainability Standards Board draft sustainability and climate-change standards: sites of dissonance or consensus

Purpose This paper aims to examine sites of dissonance or consensus between global investor responses to the draft standards, International Financial Reporting Standards S1 (IFRS) (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures), issued by the International Sustainability Standards Board (ISSB). Design/methodology/approach A thematic content analysis was used to capture investor views expressed in their comment letters submitted in the consultation period (March to July 2022) in comparison to the ex ante position (issue of draft standards, March 2022) and ex post summary feedback (ISSB staff papers, September 2022) of the ISSB. Findings There was investor consensus in support of the ISSB and the development of the draft standards. However, there were sites of dissonance between investors and the ISSB, notably regarding the basis and focus of reporting (double or single/financial materiality and enterprise value); definitional clarity; emissions reporting; and assurance. Incrementally, the research further highlights that investors display heterogeneity of opinion. Practical and Social implications The ISSB standards will provide a framework for future sustainability reporting. This research highlights the significance of such reporting to investors through their responses to the draft standards. The findings reveal sites of dissonance in the development and alignment of draft standards to user needs. The views of investors, as primary users, should help inform the development of sustainability-related standards by a global standard-setting body apposite to current policy and future reporting requirements, and their usefulness to users in practice. Originality/value To the best of the authors’ knowledge, this paper makes an original contribution to the comment letter literature, hitherto focused on financial reporting with a relative lack of investor engagement. Using thematic analysis, sites of dissonance are examined between the views of investors and the ISSB on their development of sustainability reporting standards.

The impacts of registration regime implementation on IPO pricing efficiency

We study the impacts of regime changes and related rule implementations on IPOs' initial return for China's entrepreneurial boards (ChiNext and STAR). We propose that an initial return contains the issuer's fair value and an investors' overreaction and examine their magnitudes and determinants. Our findings reveal an evolution of IPO pricing in response to the progression of regulation changes along five dimensions, and the most efficient regulation regime in Chinese IPO pricing has the following characteristics: 1) registration system, 2) no hard return caps nor trading curbs that restrict the initial return; 3) more specific listing rules for issuers, 4) more strict participation constraints for investors, and 5) more stringent information disclosure requirements for issuers and underwriters. In all contexts, we show that the registration regime governing the STAR IPOs offers the most efficient pricing. We make recommendations on future regulation regime reform for China's entrepreneurial boards.

Research on Enterprise Green Accounting Information Disclosure under the Background of Low-carbon Economy

In order to explore the low carbon economic background of green accounting information disclosure, understand the industry how to adapt to the sustainable development and environmental trends, the article from the overview of the low carbon economy, analyzes the low carbon economy of home appliance enterprise green accounting information disclosure requirements, after according to the current home appliance enterprise green accounting information disclosure problems put forward the specific solutions, including encouraging home appliance enterprise voluntary disclosure of social responsibility information, improve the home appliance enterprise green accounting information disclosure constraint system, improve the home appliance enterprise green accounting information disclosure content, etc. Research shows that the green accounting information disclosure in the home appliance industry plays a key role in the era of low-carbon economy, and helps to improve the sustainability, transparency and credibility of enterprises. However, there are still some challenges, in order to achieve a greener and more sustainable economic development, home appliance enterprises need to further improve their green accounting information disclosure practices to meet the growing demand for environmental protection.

Sustainability factors consideration: Emerging trends in financial reporting

Subject. This article discusses the requirements for disclosure of sustainability factors in financial statements due to the release of the International Disclosure Standard IFRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information. Objectives. The article aims to reveal the content of the main provisions set forth in the IFRS S1 Standard issued by the International Sustainability Standards Board (ISSB) (sponsored by the IFRS Foundation), assess the possibility of applying the requirements of the Standard in Russia, and identify possible problems in its implementation and propose ways to solve them. Methods. For the study, we used analysis, synthesis, comparison, generalization, and abstraction. Results. The article defines that the presentation of information on risks and opportunities related to sustainable development should be carried out from the perspective of four aspects, namely governance, strategy, risk management, metrics and goals of the organization in the field of sustainable development. It discloses the content of the main sections of the Standard and formulates the factors and conditions for the applicability of the IFRS S1 Standard in Russia, as well as possible problems associated with its application, and proposals for their solution. Conclusions. The requirements for disclosure of financial information on risks and opportunities related to sustainable development, established by the International Disclosure Standard IFRS S1, are aimed to increase the availability of key users of financial statements to information reflecting the impact of sustainable development factors on the financial position, financial results, and cash flows of the organization. Standardization of disclosure of such information can help reduce the costs of preparers, analysts, auditors and other interested users, and stimulates the current trend of introducing the concept of sustainable development into management practice, including by Russian organizations.

Методичне забезпечення оцінки якості нефінансової звітності підприємств

Introduction. Currently, the task of harmonizing domestic legislation in the field of accounting and reporting with the directive requirements of the EU has arisen, in particular in terms of conceptual and terminological differences, the mechanism for collecting and processing data from non-financial reports of enterprises and the lack of a proper system for ensuring their quality. Problem Statement. The existence of a wide variety of approaches to the preparation of non-financial reporting by enterprises ,on the one hand , and the lack of regulation in domestic legislation of approaches to disclosure of information on sustainable development by business entities lead to a decrease in the quality of reporting data (comparability, transparency, reliability), on the other hand. The purpose is to scientifically substantiate the methodological tools for assessing the quality of non-financial reporting of enterprises. Methods: bibliographic analysis, graphical method as well as analysis and synthesis methods were used. Results. In the context of the development of the concept of quality of non-financial reporting and its reflection in regulatory documents of various levels, it has been identified that, despite the global level of its distribution, there is currently no clear understanding of the definition of quality of non-financial reporting as the basis for building a system for its assessment. The authors have developed the conceptual and categorical apparatus in the studied area by formulating a definition of the concept of “quality of non-financial reporting”. Conclusions. The paper proposes a draft Methodology for entities’ non-financial reporting quality assessment with regard to disclosure of information to justify the provision of state support to overcome the consequences of the pandemic of particularly dangerous infectious diseases (draft Methodology) is an attempt to solve it. The document is based on internationally recognised standards for corporate sustainability disclosures: IFRS S1 “General Requirements for Disclosure of Sustainability-related Financial Information”; IFRS S2 “Climate-related Disclosures”; European Sustainability Reporting Standards (ESRS 1 “General Principles”). The draft Methodology proposed in this paper includes three sections: General provisions; Procedure for assessing the quality of non-financial reporting; Organisation of the quality assessment of non-financial reporting at the enterprise.

INTERNATIONAL REGULATIONS FOR SUSTAINABLE DEVELOPMENT ACCOUNTING REPORTS

The International Standards Board for Sustainable Development (ISSB) published in 2023 the ”General Requirements for Disclosure of Sustainability-related Financial Information” and the International S2 IFRS Standards for "Climate-Related" Financial Reporting, whereby the accounting community felt the need for additional informative comments. The article analyzes the prerequisites for the introduction of sustainable development standards and the possibilities of their application. The priorities of the information related to the sustainable development of the organizations in the published integrated financial reports were partially clarified.

Does disclosure of customers' identities benefit a company's performance in the product market? Evidence from China

Based on a research sample of A-share listed companies from 2007 to 2019, this paper empirically examines the impact of voluntary disclosure by companies of customers' information on companies' performance in the product market. The results indicate that the more detailed the information disclosed about customers, especially regarding customers' identities, the more significantly the company's product market return decreases in the following year. This effect is more pronounced among non-state-owned companies, companies in non-regulated industries, companies with greater R&D expenditure, companies in more competitive industries, follower companies, and companies not audited by big four audit firms. The effect is more pronounced when there is a listed customer or a related customer. Mechanism tests indicate that disclosure of customers' identities will undermine companies' competitive position, customer stability, pricing power and operating assets turnover rate. This research is useful for analyzing the policy effects of current customer information disclosure requirements and provides guidance for disclosure policies in emerging markets.

Delamination of information disclosure and stock price synchronicity — Evidence from China’s NEEQ market

Information disclosure aids investor in better valuating firm, but how does stock price react to a better information disclosure environment? Using a policy shock in which information disclosure requirements are delaminated, we implement a difference-in-difference approach to evaluate how delaminated stocks behave differently compared to other stocks listed in a Chinese OTC market NEEQ. We find that this reduces the stock price synchronicity of those affected stocks, controlling other firm characteristics. Investors are motivated by the policy, as evidenced by the increased trading volume to the affected stocks, which serving a mediating role that affects the synchronicity of stock prices. We interpret the result that more firm-specific information is reflected in the price through transactions, hence the improved pricing efficiency of the delaminated stocks shows a decline of synchronicity.

Social indicators in russian company reports

In recent years, the importance of non-financial reports on the sustainable development of corporate entities that carry out socially significant activities in a country, region, or city has increased. International non-governmental organizations have developed standards for them, which form recommendations for improving their social responsibility. According to the standards, corporations should disclose in their reports information about their activities in the context of economy, ecology, and social sphere. The article analyzes current reports on sustainable development of large domestic companies engaged in exploration and production of hydrocarbons. The choice of this sector of the economy was not accidental, since these companies, through their activities, harm the environment, and their employees work in quite difficult and dangerous conditions. It is concluded that sustainability reports are not always complete, in particular, problematic aspects related to the social sphere of the company are at least partially omitted. In this regard, there is a need to introduce uniform regulatory requirements for disclosure of information on the social performance of an organization. At the same time, it is necessary to fix not only the content part, as a minimum, which should be described in the reports, but also to provide for the forms of such reports.

Does Time Frame of IPO Proceeds Predict Survival of Firms? Evidence from the Malaysian Market

Initial public offering (IPO) information disclosures such as the IPO proceeds’ strategic uses and the time frame have the potential to signal the listing firms’ post-IPO survival. We investigate the impact of IPO proceeds on 423 firms’ ability to maintain survival in business in Malaysia from 2000 to 2014. With a median survival span of approximately 104 months, our examination of survival data reveals that more than 40% of the firms in our sample had trouble surviving after their seventh year of listing. Our findings indicate that the share of IPO proceeds and the firms’ time horizon may be used to forecast whether or not they will survive, with meeting financial obligations serving as the primary motivating factor. A major fraction of IPO proceeds used for growth motives and financial obligations lead to shorter survival, while a longer time frame to meet the obligations leads to longer post-IPO survival. Our findings offer empirical support for regulators to safeguard investors’ interests and enhance firms’ survival in an environment with developing markets; information disclosure requirements include both the use of IPO proceeds and the time frame for its utilization.

SocioLink: Leveraging Relational Information in Knowledge Graphs for Startup Recommendations

ABSTRACT While venture capital firms are increasingly relying on recommendation models in investment decisions, existing startup recommendation models fail to consider the uniqueness of venture capital context, including two-sided matching between investing and investee firms and a lack of information disclosure requirements on startups. Following the design science research paradigm and guided by the proximity principle from social psychology, we develop a novel framework called SocioLink by depicting and analyzing various relations in a knowledge graph via machine learning. Our experimental results show that SocioLink significantly outperforms state-of-the-art startup recommendation methods in both accuracy and quality. This improvement is driven by not only the inclusion of social relations but also the superiority of modelling relations via knowledge graph. We also develop a web-based prototype to demonstrate explainable artificial intelligence. This work contributes to the FinTech literature by adding an innovative design artifact—SocioLink—for decision support in the investment context.

Disaster response: The COVID-19 pandemic and insider trading around the world

This paper investigates how corporate insiders respond to the initial COVID-19 outbreaks. Using comprehensive insider transaction data from 25 countries, we document a consistent pattern of insider selling during the month after the first COVID-19 case is confirmed in a given country. Insider selling during these disease outbreaks is less pronounced in countries with higher information disclosure requirements, higher public enforcement index, a more efficient judiciary system, and stronger investor protection. Furthermore, cultural differences and the stringency levels of government responses to the COVID-19 outbreaks help moderate insider panic selling when health disasters strike. The findings suggest that a transparent, reliable business system contributes to rebuilding investor trust and corporate resilience during crises.

Analysis of the information verification model in non-financial reporting of oil and gas companies

The article is aimed at investigating the current practice of verifying information in non-financial statements of oil and gas sector companies. The study is based on the analysis of the current regulatory framework for confirming “(certification)” of non-financial reporting, which is structured into two blocks: regulatory documents that define the requirements for the disclosure of information in non-financial reporting, applied at the international and national levels, and regulatory documents that define the requirements for the verification of non-financial reporting at the international and national levels. A comparative analysis of the main standards and recommendations used for disclosure of information in ESG reporting is carried out. Regulatory acts containing general requirements for disclosure of information about the activities of PJSC oil and gas complex in the Russian Federation are considered. The systematization of Russian regulations in the field of disclosure of information on sustainable development and ESG factors and structural elements of the annual report is carried out and the characteristics of the main regulations for conducting an independent audit of non-financial reporting are given. In the course of the study, a matrix of categories was developed that ensure the reliability of public reporting. The features of the verification practice of Russian oil and gas companies that are system-forming are considered. An overview of Russian companies disclosing non-financial information in accordance with GRI, SASB, TCFD and CDP standards is presented. Based on the conducted research, it is concluded that the current regulatory framework in the field of confirmation (assurance) of non-financial reporting requires improvement of the terminology and differentiation of the concepts of “verification”, “assurance”, “confirmation”, “audit”, in order to develop the practice of business audit of the XXI century. The study can be useful for managers and decision makers aimed at implementing the Concept of Sustainable Development and achieving Sustainable Development Goals.

МЕТОДОЛОГІЧНІ АСПЕКТИ ОБЛІКУ ДЕБІТОРСЬКОЇ ТА КРЕДИТОРСЬКОЇ ЗАБОРГОВАНОСТЕЙ В СИСТЕМІ РОЗРАХУНКІВ: ВІТЧИЗНЯНА ТА МІЖНАРОДНА ПРАКТИКА

The purpose of the study is to reveal certain methodological aspects of accounting for receivables and payables in order to improve the accounting information base in today's complex conditions. To achieve the goal, the tools of scientific research are applied, namely: analysis and synthesis, induction and deduction (when posing a problem); comparison, systematization and theoretical generalization (during the comparative analysis of moments of recognition, termination of recognition, evaluation and reflection in financial statements of receivables and payables, as well as when determining the reserve of doubtful debts of receivables); graphic method for rational, compact, visual presentation of research material; the cause-and-effect method and the abstract-logical method were used in the development of directions for further research. The article examines the main methodological aspects of accounting for receivables and payables in the settlement system by comparing the recommendations of national and international standards. Improving the accounting of receivables and payables will allow to improve the settlement management system and ultimately the financial condition of the enterprise. A list of national and international standards that determine the methodological principles of accounting for receivables and payables is given. The main methodological aspects of displaying information about receivables and payables in national and international accounting practice were analyzed by comparing the recommendations of the standards. This is the recognition, termination of recognition, evaluation and reflection in the financial statements of receivables and payables, as well as the issue of determining the reserve of doubtful debts receivables. It is substantiated that the methodological aspects of national accounting of receivables and payables mainly correspond to international ones.. Differences have been established in terms of the definition and methods of assessment, creation of a reserve for doubtful debts ("expected credit losses") and requirements for disclosure of information in accounting reports. Prospects for further research are outlined, in particular, a thorough study of these differences through the prism of the possibility of implementing the requirements of international standards into national practice to improve the accounting information base in today's complex conditions.

Placement of social bonds through crowdfunding: Global trends and prospects for implementation in domestic practice

The article considers the possibility of using additional sources of financing in the construction and operation of social infrastructure facilities. We are talking about the use of social bonds. The idea belongs to the International Capital Markets Association (ICMA), where the issue of social bonds is designed to solve specific problems of society, ensuring the saving of public fundsThe issue and circulation of social bonds must comply with a number of principles: the mandatory use of funds from the placement of these bonds for the development of the company, special criteria for the selection of projects of social impact and assessment of social effect, requirements for disclosure of information and its transparency. At the same time, it is necessary that investment projects are aimed at achieving positive social results that can be quantified. An attempt was made to develop measures to combine the instrument of social bonds and the principles of investment crowdfunding for the accumulation of funds by municipalities. The theoretical and methodological basis of the study was the work of domestic and foreign scientists in the field of analyzing government debt obligations to expand investment in infrastructure facilities at the regional and local levels, as well as research on the use of crowdfunding in the implementation of non-capital-intensive investment projects. The information base of the study was compiled by analytical reviews of the National Center for Public-Private Partnership, data from domestic statistics, analytical reviews of the Bank of Russia.