Business and Economic Horizons

  Previous Article | Back to Volume | Next Article
  Abstract | References | Citation | Download | Preview | Statistics
Volume 11
Issue 3
Online publication date 2015-10-16
Title The main categories of disclosures concerning control over financial reporting: The practice of companies listed on the Warsaw Stock Exchange
Author Gad Jacek
Abstract
The aim of this paper is to answer the question whether, and, if so, to what extent, control over financial reporting is exercised in practice. An attempt was made to measure the control by analysing the disclosures regarding the control over financial reporting which were included in the annual reports and statements on corporate governance. 
The annual reports of the companies listed on the WSE were the subject of the research. The research problems presented in this article with regard to the disclosures about the control over financial reporting have only been discussed to a limited extent in the literature. It seems that the list of disclosures is an important part of this paper. It can serve as a reference point for the development of a disclosure index and, additionally, provide a basis for a verification of research questions that may be posed in the future.
The results of the study indicate that there was no single form of disclosing the information on internal control and risk management systems in relation to financial reporting in the reporting practices of the public companies listed on the Warsaw Stock Exchange in 2011. The disclosures were different both in terms of the degree of detail and the content. The companies listed on the WSE presented the information on control over financial reporting within 13 major categories of disclosures identified in the study.   

Citation
References
AFR, 2002, "US Crisis of Confidence", Australian Financial Review, 4/5 May, p.24
 
AICPA, 1994. Improving business reporting - A customer focus, New York
 
Bauwhede H.V., Willekens M., 2008. "Disclosure on corporate governance in the European Union", Corporate governance: An international review, Vol.16, No.2, pp.101-115
 
Beattie V., McInnes B., Fearnley S., 2004. "A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes", Accounting Forum, Vol.28, pp.205-236, http://dx.doi.org/10.1016/j.accfor.2004.07.001
 
Botosan C.A., 1997. "Disclosure level and the cost of equity capital", The Accounting Review, Vol.72, No.3, pp.323-349
 
Clarke T., 2004. "Cycles of crisis and regulation: The enduring agency and stewardship problems of corporate governance", Corporate Governance - An International Review, Vol.12, No.2, pp.153-161
 
Clarke T., 2005. "Accounting for Enron: Shareholder value and stakeholder interests", Corporate Governance: An International Review, Vol.13, No.5, pp.598-612, http://dx.doi.org/10.1111/j.1467-8683.2005.00454.x
 
Coates J.C., 2007. "The goal and promise of the Sarbanes-Oxley Act", Journal of Economic Perspectives, 21, pp.91-116, http://dx.doi.org/10.1257/jep.21.1.91
 
Core J.E., 2001. "A review of the empirical disclosure literature", Journal of Accounting and Economics, Vol.31, No.3, pp.441-456, http://dx.doi.org/10.1016/S0165-4101(01)00036-2
 
Directive 2006/46 / EC of the European Parliament and of the Council of 14 June 2006. Amending Council Directive 78/660 / EEC on the annual accounts of certain types of companies, 83/349 / EEC on consolidated accounts, 86/635 / EEC on the annual and consolidated accounts of banks and other financial institutions and 91/674 / EEC on the annual accounts and consolidated accounts of insurance undertakings
 
Ernst and Young, 2005. File No.4 - 497, Implementation of Sarbanes-Oxley Internal Controls Provisions, April, p.3, http://www.sec.gov/spotlight/soxcomp/soxcomp-turley.pdf, accessed on 15th Feb. 2011
 
Gad J., 2015. "Disclosures on control over financial reporting: the reporting practice of banks listed on the Warsaw Stock Exchange", Financial Internet Quarterly e-Finanse, Vol 11, No.1, pp.1-10, doi: 10.14636/1734-039X_11_1_001
 
Ghosh A., Lee Y.G., 2013. "Financial reporting quality, structural problems and the informativeness of mandated disclosures on internal controls", Journal of Business Finance and Accounting, Vol.40, No.3 and 4, pp.318-349, doi:10.1111/jbfa.12015, http://dx.doi.org/10.1111/jbfa.12015
 
Hammersley J.S., Myers L.A., Shakespeare C., 2008. "Market reactions to the disclosure of internal control weaknesses and to the characteristics of those weaknesses under section 302 of the Sarbanes Oxley Act of 2002", Review of Accounting Studies, Vol.13 Issue 1, pp.141-165, http://dx.doi.org/10.1007/s11142-007-9046-z
 
Healy P.M., Palepu K.G., 2001. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature", Journal of Accounting and Economics, Vol.31 No.3, pp.405-440, http://dx.doi.org/10.1016/S0165-4101(01)00018-0
 
Hoitash U., Hoitash, R., Bedard, J.C., 2009. "Corporate governance and internal control over financial reporting: A comparison of regulatory regimes", The Accounting Review, Vol.84, No.3, pp.839-867, http://dx.doi.org/10.2308/accr.2009.84.3.839
 
Horn L., 2012. "Corporate Governance in Crisis? The Politics of EU corporate governance regulation", European Law Journal, Vol.18, No.1, pp.83-107, http://dx.doi.org/10.1111/j.1468-0386.2011.00587.x
 
International Federation of Accountants, 2011. "Global Survey on Risk Management and Internal Control, Results, Analysis, and Proposed Next Steps", Published by the Professional Accountants in Business Committee
 
ISO 31000, 2009. "Risk management - Principles and guidelines"
 
Jarugowa A., Marcinkowski J., 1989. "Uwagi do ewolucji funkcji rachunkowości w Polsce", [Notes on the evolution of the accounting function in Poland], Folia Oeconomica, No.88, pp.19-29.
 
Marcinkowska M., 2013. Corporate governance w bankach. Teoria i praktyka, [Corporate governance in banks. Theory and Practice], Wydawnictwo Uniwersytetu Łódzkiego, Łódź
 
Marston C.L., Shrives P.J., 1991. "The use of disclosure indices in accounting research: A review article", British Accounting Review, Vol.23, No.3, pp.195-210, http://dx.doi.org/10.1016/0890-8389(91)90080-L
 
Naiker, Vic; Sharma, Divesh, S., 2009. "Former audit partners on the audit committee and internal control deficiencies", The Accounting Review, Vol.84 Issue 2, pp.559-587, http://dx.doi.org/10.2308/accr.2009.84.2.559
 
Nitkowski, K., 2013. Kontrola wewnętrzna instytucjonalna w systemie kontroli w przedsiębiorstwie, [Institutional internal control in the control system in the enterprise], Wydawnictwo Naukowe PWN, Warszawa
 
Ogneva, M., Subramanyam, K.R., Raghunandan, K., 2007. "Internal control weakness and cost of equity: Evidence from SOX Section 404 Disclosures", The Accounting Review, Vol.82 Issue 5, pp.1255-1297, http://dx.doi.org/10.2308/accr.2007.82.5.1255
 
Robb S.W.G., Single L.E., Zarzeski M.T., 2001. "Nonfinancial disclosures across Anglo-American countries", Journal of International Accounting, Vol.10, No.1, pp.71-83, http://dx.doi.org/10.1016/s1061-9518(01)00036-2
 
The Commission to the Council and the European Parliament, 2003, Modernising Company Law and Enhancing Corporate Governance in the European Union - A Plan to Move Forward, Brussels, 21.5.2003, COM (2003) 284 final
 
The International Auditing and Assurance Standards Board, 2006. "Internal Control over Financial Reporting - Guidance for Smaller Public Companies", COSO
 
The Sarbanes-Oxley Act of 2002, Pub.L. 107-204, 116 Stat.745, enacted July 30, 2002, also known as the Public Company Accounting Reform and Investor Protection Act
 
Wang X., 2012. "Increased disclosure requirements and corporate governance decisions: Evidence from chief financial officers in the Pre- and Post-Sarbanes-Oxley Periods", Journal of Accounting Research, Vol.48, No 4, pp.885-920
 
Winter J. et al., 2002. Report of the high level group of company law experts on a modern regulatory framework for company law in Europe, Brussels, November
Keywords Financial reporting, disclosures, control over financial reporting
DOI http://dx.doi.org/10.15208/beh.2015.12
Pages 162-172
Download Full PDF Download
  Previous Article | Back to Volume | Next Article
Share
Search in articles
Statistics
Journal Published articles
BEH 558
Journal Hits
BEH 1133787
Journal Downloads
BEH 41281
Total users online -