The irony of financial reporting

Abstract

PURPOSE: Reporting is one of the most basic functions of the accounting information system. Financial information of entities is transferred to financial statement users through the reporting function. Also, the audit process, which ensures the reliability of the accounting information system, ends with reporting. In today鈥檚 world with the changes in the economic, cultural, social, and technological areas, the standard reporting approach has changed, the scope of reporting activities has expanded and the diversity of the items to be reported has increased. This study aims to consider the matter of irony caused by these changes in the nature of financial reporting system and make a proposal to this matter.

METHODOLOGY: This study was based on theoretical research. Research papers prepared and issued by big four audit companies and information obtained from literature were used in the study. In the scope of the study, changing reporting approaches and new types of reportings were considered based on the changes in the reporting function which is one of the main functions of accounting and auditing and a matter of irony in the nature of the financial reporting system that caused by these changes was discussed, theoretically.

FINDINGS: Recommendations and proposals were presented at the end of the study for dealing with the matter of irony in the financial reporting system.

ORIGINALITY/VALUE: Unlike the previous studies in the literature which focused on changes, advantages, and usefulness of new reporting approaches and new trends in reporting systems, this study focused on raising awareness of problems of new reporting approaches and trends and attracting attention to a matter of irony caused by these approaches and trends in the reporting system.