TRANSFORMATION OF CORPORATE REPORTING-FROM FINANCIAL TO BUSINESS REPORTING

The current global economic downturn has shown the folly of business and investment decisions based on short-term gains. Many authors have remarked on what they consider to be discrepancy between information provided by financial reporting and the information financial statement users need. Financial statements alone are not sufficient to communicate overall performance of an enterprise. Some authors have characterized this as disconnect between “information economy“ companies and “industrial economy” financial reporting. Many of them have contended that financial statement users need more nonfinancial information, more forward-looking information and more information about intangible assets. Solution is in an integrated approach of utilization the financial information together with information from the business reporting. Business reporting cannot be static, or it will be inadequate. The business reporting has to be changed in order to reflect changes in business, in information technology and in users¢ needs. Unlike financial reporting focusing on investors,
business reporting is focused on stakeholders. This approach is accordance with the concept of the corporate social responsibility.

Keyword: financial reporting, business reporting, value added reporting, value reporting, integrated reporting, corporate social responsibility.

JEL Classification: M41