Research Article


DOI :10.26650/MED.797559   IUP :10.26650/MED.797559    Full Text (PDF)

Evaluations on the Future of Corporate and Financial Reporting

Hakan Cavlak

The most important tool that businesses use in communicating with their stakeholders is corporate reports. Also, corporate reports are the final output of the corporate reporting process. It includes the results of the past operating activities of the business and its predictions for the future. Among corporate reports, financial reports have the longest history and the most common use. Various changes in corporate and financial reporting as a result of changes in markets, operating structures, stakeholder demands, and technology are the subject of this study. The future of corporate and financial reporting is another issue discussed in the study. Increased interest in non-financial information, the increasing importance of intangible assets, sustainability, and digitalization are results of these changes. As a result of these, different types of corporate reports have emerged. Also, it was necessary for this study to document various changes in financial reports. Change and development regarding corporate and financial reporting will continue in various frameworks in the future. However, the Covid-19 pandemic, which has created great uncertainty and has impacted every field, has shown its effect on corporate and financial reports in the form of further disclosure. Also, due to the economic impact of the pandemic, it is observed that business stakeholders have attached more importance to financial reports compared to other corporate reports in this period.

DOI :10.26650/MED.797559   IUP :10.26650/MED.797559    Full Text (PDF)

Kurumsal ve Finansal Raporlamanın Geleceği Üzerine Değerlendirmeler

Hakan Cavlak

İşletmelerin paydaşları ile iletişiminde kullandıkları en önemli araç kurumsal raporlardır. Kurumsal raporlar, kurumsal raporlama sürecinin bir nihai çıktısıdır ve işletmenin geçmiş faaliyetlerine ilişkin sonuçlar ile geleceğine yönelik öngörülerini içermektedir. Kurumsal raporlar içerisinde ise finansal raporlar, en uzun geçmişe ve en yaygın kullanıma sahip olan rapor türüdür. Bu çalışmada, zaman içinde piyasaların, işletme yapılarının, paydaş taleplerinin ve teknolojinin değişim göstermesi neticesinde kurumsal ve finansal raporlamada yaşanan ve gelecekte yaşanabilecek muhtelif değişiklikler incelenmektedir. Bu değişiklikler ağırlıklı olarak, finansal bilgi yanında finansal olmayan bilgiye ilişkin artan ilgi, maddi olmayan varlıkların önem kazanması, sürdürülebilirlik ve dijitalleşme olgusu ile birlikte kendini göstermiştir. Bunların bir neticesi olarak da farklı kurumsal rapor türleri ortaya çıkmış ve finansal raporlarda kendi içinde çeşitli değişimler göstermek zorunda kalmıştır. Gelecekte de kurumsal ve finansal raporlamaya ilişkin değişimin ve gelişimin muhtelif çerçevelerde devam edeceği öngörülmektedir. Diğer taraftan her alanda büyük bir belirsizlik ve etki oluşturan Covid-19 pandemisinin de kurumsal ve finansal raporlar üzerinde daha fazla açıklama şeklinde kendini gösterdiği göze çarpmaktadır. Ayrıca pandeminin ekonomik olarak oluşturduğu etkiden dolayı bu dönemde işletme paydaşlarının kurumsal raporlar içerisinde ağırlıklı olarak finansal raporlara daha fazla önem verdiği gözlemlenmektedir.


EXTENDED ABSTRACT


Businesses present the results of their operating activities and their future targets to their stakeholders through various tools. This communication between businesses and their stakeholders is mostly provided by corporate reports. Corporate reports, which are an output of the corporate reporting process, are presented in more than one form today (financial reportindependent audit report-, annual report, corporate governance compliance report, sustainability report, integrated report). Among these reports, financial reports are the type of corporate report with the longest history and the most common use. Financial reports have the longest history and the most common usage among these reports. Financial reports are the presentations of the financial statements created by the companies at the end of the financial reporting process. This presentation is generally provided by an independent audit report today. Financial statements, which are shown in detail in the independent audit report and are an output of the financial reporting process, are also shown in the annual reports of the companies in a summary manner. Also, companies almost do not use the term “financial report” when presenting these reports. As a result, the presentation of the financial statements that form the basis of the financial report is presented to the business stakeholders at the end of the financial reporting process under the name of “independent audit report” or “annual report”. Apart from the report, financial statements and their data are presented under headings such as investor presentations and summary financial data on the websites of companies.

Changes in business structures, investor profile, stakeholder demands and technology, progress in environmental and social awareness, and similar factors have caused the information provided by financial reports to be insufficient to tell the whole story of the business. Therefore, non-financial information has been needed in the evaluation of businesses. Businesses try to meet this need by presenting different corporate reports (sustainability report and integrated report, etc.). In summary, the development of corporate reporting that started with financial reporting continues with different types of reports. Corporate reporting development, which improved with the annual report and corporate governance report, continued with sustainability report in the 2000s and with integrated report in the 2010s.

Although the scope of corporate reporting has undergone a great change in the last fifty years and different corporate reports have been created, the demand for financial reporting has not lost its effect. In other words, financial reports remain important, and the basis for decision-making. Factors such as the preparation of financial reports according to certain international standards, the use of a common language, the importance of financial information, and the fact that other types of corporate reports will always need the information produced by financial reports have been effective in this. However, it is acknowledged that financial reporting has changed in itself especially in response to stakeholder demands and technological progress. 

Financial reports have been the cornerstone and driving element of corporate reporting for more than half a century. However, factors such as the economic structure that have moved from an industrial basis to a position driven by technology and information, and the change in stakeholder expectations have forced changes in both financial and corporate reports. It is predicted that issues such as the increasing demand for non-financial information, the increasing importance of intangible assets, the inclusion of big data, blockchain, cloud computing and artificial intelligence in reporting processes will guide the future of both corporate reports and financial reports. In this process, various responsibilities fall on both the reporting regulators, the companies that will carry out the reporting process, and the report users. Fulfilling these responsibilities effectively and in cooperation will ensure that corporate and financial reports are placed in the correct position of communication between the business and the stakeholders.

An issue that can be expressed in evaluations for the future of corporate and financial reporting is related to the environment of uncertainty created by Covid-19. The situation revealed by Covid-19 has led to an increase in the disclosures of businesses to their stakeholders through other communication tools, especially financial reports. In the Covid-19 period, business stakeholders, especially investors, have decreased their non-financial information requests from businesses compared to the pre-Covid-19 period and increased their demands for financial information. This indicates that financial reports have become more important in this extraordinary period compared to other corporate reports. On the other hand, businesses should pay more attention to matters such as business continuity, going concern, liquidity, cash management, assumptions, estimation processes, government grants, footnote disclosures, risk management and audit activities in the financial reporting process to be carried out during this period of uncertainty. It is also stated that the communication that businesses will establish with their stakeholders in this period will guide the future of corporate and especially financial reporting.


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Cavlak, H. (2021). Evaluations on the Future of Corporate and Financial Reporting. Journal of Accounting Institute, 0(64), 39-58. https://doi.org/10.26650/MED.797559


AMA

Cavlak H. Evaluations on the Future of Corporate and Financial Reporting. Journal of Accounting Institute. 2021;0(64):39-58. https://doi.org/10.26650/MED.797559


ABNT

Cavlak, H. Evaluations on the Future of Corporate and Financial Reporting. Journal of Accounting Institute, [Publisher Location], v. 0, n. 64, p. 39-58, 2021.


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Cavlak, Hakan,. 2021. “Evaluations on the Future of Corporate and Financial Reporting.” Journal of Accounting Institute 0, no. 64: 39-58. https://doi.org/10.26650/MED.797559


Chicago: Humanities Style

Cavlak, Hakan,. Evaluations on the Future of Corporate and Financial Reporting.” Journal of Accounting Institute 0, no. 64 (Jul. 2021): 39-58. https://doi.org/10.26650/MED.797559


Harvard: Australian Style

Cavlak, H 2021, 'Evaluations on the Future of Corporate and Financial Reporting', Journal of Accounting Institute, vol. 0, no. 64, pp. 39-58, viewed 25 Jul. 2021, https://doi.org/10.26650/MED.797559


Harvard: Author-Date Style

Cavlak, H. (2021) ‘Evaluations on the Future of Corporate and Financial Reporting’, Journal of Accounting Institute, 0(64), pp. 39-58. https://doi.org/10.26650/MED.797559 (25 Jul. 2021).


MLA

Cavlak, Hakan,. Evaluations on the Future of Corporate and Financial Reporting.” Journal of Accounting Institute, vol. 0, no. 64, 2021, pp. 39-58. [Database Container], https://doi.org/10.26650/MED.797559


Vancouver

Cavlak H. Evaluations on the Future of Corporate and Financial Reporting. Journal of Accounting Institute [Internet]. 25 Jul. 2021 [cited 25 Jul. 2021];0(64):39-58. Available from: https://doi.org/10.26650/MED.797559 doi: 10.26650/MED.797559


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Cavlak, Hakan. Evaluations on the Future of Corporate and Financial Reporting”. Journal of Accounting Institute 0/64 (Jul. 2021): 39-58. https://doi.org/10.26650/MED.797559



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Submitted20.09.2020
Accepted02.11.2020
Published Online31.01.2021

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