Requirements to accounting (financial) reporting in modern conditions

In modern market conditions the role of accounting statements is expressed in providing communications between an economic entity engaged in financial and economic activities and interested users who need information about the property and financial situation and the results of the operations of the enterprise. The importance of the quality and content of reporting for its users is determined by the fact that its data act as an alternative solution for various kinds of solutions. Accelerating rates of economic development also lead to changes in the nature of the interrelations between economic entities and, accordingly, their needs for the information provided, which requires the improvement of the system of requirements for financial reporting.

Accounting reporting as a final document contains a set of integrated financial indicators, designed to meet the interests common to its various users. Therefore, the ability to fully satisfy the information requests of its users of any category can not act as a requirement for the reporting of the organization. Despite this, the very purpose of reporting determines the vector of development in the direction of maximizing the information richness of its content.

In any economic environment financial statements must meet generally accepted principles and requirements laid down in the legal acts on accounting of the Russian Federation, which meet the international requirements for financial reporting.

Accounting statements should, first of all, comply with the principles of the "transparency concept", adopted in IAS (the international accounting standards).1 Transparency of reporting is achieved by the reliability of its data, which is especially important at the present time, when economic and financial relations of economic entities are built on contractual basis.

The reliability of the reporting should ensure its neutrality, excluding the possibility of unilateral satisfaction of the interests of the participants in the relationship. The possibility of influencing the assessments and decisions of the users of reporting through the selection or presentation of information should be excluded.2

Accounting reporting is an information base for making different decisions by its users. A competent and economically sound decision depends not only on the level of knowledge, qualification and professionalism of the person who accepts it: in many respects it is determined by the sufficiency of the available data. Given this circumstance, the requirement of completeness is also singled out.

However, the requirements for completeness and reliability of information in financial statements may contradict the requirement of its timeliness. Despite this, disregard of any of these requirements is unacceptable. Timeliness of information ensures its relevance, since belated reporting can lead to untimely adoption of managerial decisions, which will be expressed in the "temporary lag" manifestations of the economic effect of the decision. This, in turn, will reduce its effectiveness.

Accounting reporting should be comparable, which provides an opportunity to analyze changes in the financial position of the economic entity and the results of its operation.

Accounting reporting should be understandable to its user. This is achieved, among other things, by establishing uniform requirements for the composition and procedure for the formation of a system of reporting indicators. In connection with the integration of economic relations between domestic and foreign enterprises, access to the world market, and attraction of foreign investments, the principle of comprehensibility of financial statements requires harmonization of accounting and reporting rules with IAS.

These qualitative characteristics do not exhaust the list of generally accepted reporting requirements. In modern conditions, it seems advisable to distinguish two more characteristics of financial statements: its verifiability and the degree of analyticity.

The verifiability of information contained in the financial statements makes it possible to form a guarantee of its reliability. Observance of this principle is facilitated by the audit institute, which provides an independent assessment of the reliability of the reporting and compliance with the procedure for the formation of its indicators established by the current legislation rules. At the present time, an initiative audit, which contributes to the establishment of trust and strong relationships among organizations, is becoming increasingly widespread.

The changes made to the system of reporting indicators for recent periods were directed to the aggregation of articles, which led to a decrease in the analytical nature of the financial statements. On the one hand, this ensures the brevity and clarity of reporting, not allowing it to be overloaded with excessively separate articles. On the other hand, such changes may lead to difficulties in the implementation of a full analysis of the financial condition of the enterprise and the results of operations based on the financial statements.3

Qualitatively carried out analysis of accounting statements will allow management personnel to identify in a timely manner "bottlenecks" that worsen the financial situation of the enterprise and develop a set of measures aimed at eliminating existing shortcomings and threats, minimizing their consequences, and identifying reserves for the company's economic growth. To external users of the reporting, its analysis will be the economic justification for the decisions taken to establish economic and financial interaction with a particular organization.

Despite the constant changes taking place in the economic environment that may affect the perception of the required content of the accounts, the requirements for it, the traditional requirements and accounting principles generally accepted and recognized internationally, act as a kind of canons in the accounting and reporting system. They remain relevant at any time: in relation to them, only the breadth of the possibilities for compliance with them changes.