Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems

Irina Golochalova; Viorel Tsurcanu

doi:doi:10.11648/j.jfa.20200801.16

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Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems

Irina Golochalova, Viorel Tsurcanu

Published in Journal of Finance and Accounting (Volume 8, Issue 1)

Received: 19 December 2019 Accepted: 7 February 2020 Published: 18 February 2020

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Abstract

The purpose of this study is to establish the ability to assess the quality of financial statements presented by organizations in a particular jurisdiction. The preparation of useful financial statements is possible based on the imperativeness of the concept of qualitative characteristics. An analysis of the composition and grouping of qualitative characteristics outlined in the Conceptual Framework for Financial Reporting, Directive 2013/34/EU and the Law of the Republic of Moldova (RM) “On Accounting and Financial Reporting” made it possible to choose a method for developing a unified methodology for assessing quality of financial reporting in relation to accounting systems, both Anglo-Saxon and continental, as well as individual jurisdictions. A statement of the leading role of reliability and relevance in determining the usefulness of information, while maintaining the value of qualitative characteristics that increase the usefulness of information (in particular, comparability and timeliness), provided the opportunity to build a rational methodology for measuring the quality of financial statements. The proposed methodology is considered as the basis for assessing the quality of reporting, in the framework of which the value of the indicator of useful information is postulated. Based on mathematical modeling, a formula has been developed for calculating the indicator of the usefulness of information, with perfectly prepared financial statements, the value of which is 1. The use of the method of abstraction and logical thinking allowed us to determine the value of each qualitative characteristic in the quality indicator. It has been established that deviations from this indicator can be the result of either non-compliance with the information quality requirements by the reporting compiler, or ignoring the conceptual platform for presenting useful financial statements. Countries associated with the EU, including the RM, are forced to use a mixed system of accounting and qualitative characteristics (according to International Financial Reporting Standards and Directive 2013/34/EU). The implementation of the recommended methodology for measuring the quality of reporting, using the qualitative characteristics provided for in the legislative framework of the RM, proves the inefficiency of convergence of the two accounting systems in the absence of a special methodology. In general, the study demonstrated that the effective use of the concept of qualitative characteristics: is aimed at promoting the harmonization of accounting systems; serves as a reliable basis for assessing the quality of financial statements; contributes to solving the problem of improving the quality of information in the future.

Published in	Journal of Finance and Accounting (Volume 8, Issue 1) This article belongs to the Special Issue Financial Inclusion , Accounting Perspectives and Development
DOI	10.11648/j.jfa.20200801.16
Page(s)	48-58
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Qualitative Characteristics, Concept, Financial Statements, Measurement Model

References

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APA Style

Irina Golochalova, Viorel Tsurcanu. (2020). Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems. Journal of Finance and Accounting, 8(1), 48-58. https://doi.org/10.11648/j.jfa.20200801.16

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Irina Golochalova; Viorel Tsurcanu. Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems. J. Finance Account. 2020, 8(1), 48-58. doi: 10.11648/j.jfa.20200801.16

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AMA Style

Irina Golochalova, Viorel Tsurcanu. Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems. J Finance Account. 2020;8(1):48-58. doi: 10.11648/j.jfa.20200801.16

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@article{10.11648/j.jfa.20200801.16,
  author = {Irina Golochalova and Viorel Tsurcanu},
  title = {Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems},
  journal = {Journal of Finance and Accounting},
  volume = {8},
  number = {1},
  pages = {48-58},
  doi = {10.11648/j.jfa.20200801.16},
  url = {https://doi.org/10.11648/j.jfa.20200801.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20200801.16},
  abstract = {The purpose of this study is to establish the ability to assess the quality of financial statements presented by organizations in a particular jurisdiction. The preparation of useful financial statements is possible based on the imperativeness of the concept of qualitative characteristics. An analysis of the composition and grouping of qualitative characteristics outlined in the Conceptual Framework for Financial Reporting, Directive 2013/34/EU and the Law of the Republic of Moldova (RM) “On Accounting and Financial Reporting” made it possible to choose a method for developing a unified methodology for assessing quality of financial reporting in relation to accounting systems, both Anglo-Saxon and continental, as well as individual jurisdictions. A statement of the leading role of reliability and relevance in determining the usefulness of information, while maintaining the value of qualitative characteristics that increase the usefulness of information (in particular, comparability and timeliness), provided the opportunity to build a rational methodology for measuring the quality of financial statements. The proposed methodology is considered as the basis for assessing the quality of reporting, in the framework of which the value of the indicator of useful information is postulated. Based on mathematical modeling, a formula has been developed for calculating the indicator of the usefulness of information, with perfectly prepared financial statements, the value of which is 1. The use of the method of abstraction and logical thinking allowed us to determine the value of each qualitative characteristic in the quality indicator. It has been established that deviations from this indicator can be the result of either non-compliance with the information quality requirements by the reporting compiler, or ignoring the conceptual platform for presenting useful financial statements. Countries associated with the EU, including the RM, are forced to use a mixed system of accounting and qualitative characteristics (according to International Financial Reporting Standards and Directive 2013/34/EU). The implementation of the recommended methodology for measuring the quality of reporting, using the qualitative characteristics provided for in the legislative framework of the RM, proves the inefficiency of convergence of the two accounting systems in the absence of a special methodology. In general, the study demonstrated that the effective use of the concept of qualitative characteristics: is aimed at promoting the harmonization of accounting systems; serves as a reliable basis for assessing the quality of financial statements; contributes to solving the problem of improving the quality of information in the future.},
 year = {2020}
}

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TY  - JOUR
T1  - Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems
AU  - Irina Golochalova
AU  - Viorel Tsurcanu
Y1  - 2020/02/18
PY  - 2020
N1  - https://doi.org/10.11648/j.jfa.20200801.16
DO  - 10.11648/j.jfa.20200801.16
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 48
EP  - 58
PB  - Science Publishing Group
SN  - 2330-7323
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AB  - The purpose of this study is to establish the ability to assess the quality of financial statements presented by organizations in a particular jurisdiction. The preparation of useful financial statements is possible based on the imperativeness of the concept of qualitative characteristics. An analysis of the composition and grouping of qualitative characteristics outlined in the Conceptual Framework for Financial Reporting, Directive 2013/34/EU and the Law of the Republic of Moldova (RM) “On Accounting and Financial Reporting” made it possible to choose a method for developing a unified methodology for assessing quality of financial reporting in relation to accounting systems, both Anglo-Saxon and continental, as well as individual jurisdictions. A statement of the leading role of reliability and relevance in determining the usefulness of information, while maintaining the value of qualitative characteristics that increase the usefulness of information (in particular, comparability and timeliness), provided the opportunity to build a rational methodology for measuring the quality of financial statements. The proposed methodology is considered as the basis for assessing the quality of reporting, in the framework of which the value of the indicator of useful information is postulated. Based on mathematical modeling, a formula has been developed for calculating the indicator of the usefulness of information, with perfectly prepared financial statements, the value of which is 1. The use of the method of abstraction and logical thinking allowed us to determine the value of each qualitative characteristic in the quality indicator. It has been established that deviations from this indicator can be the result of either non-compliance with the information quality requirements by the reporting compiler, or ignoring the conceptual platform for presenting useful financial statements. Countries associated with the EU, including the RM, are forced to use a mixed system of accounting and qualitative characteristics (according to International Financial Reporting Standards and Directive 2013/34/EU). The implementation of the recommended methodology for measuring the quality of reporting, using the qualitative characteristics provided for in the legislative framework of the RM, proves the inefficiency of convergence of the two accounting systems in the absence of a special methodology. In general, the study demonstrated that the effective use of the concept of qualitative characteristics: is aimed at promoting the harmonization of accounting systems; serves as a reliable basis for assessing the quality of financial statements; contributes to solving the problem of improving the quality of information in the future.
VL  - 8
IS  - 1
ER  -

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Author Information

Irina Golochalova

Department of Accounting and Economic Informatics, Moldova State University, Chisinau, Republic of Moldova
Viorel Tsurcanu

Department of Accounting, Auditing and Economic Analysis, Academy of Economic Studies of Moldova, Chisinau, Republic of Moldova

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APA Style

Irina Golochalova, Viorel Tsurcanu. (2020). Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems. Journal of Finance and Accounting, 8(1), 48-58. https://doi.org/10.11648/j.jfa.20200801.16

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ACS Style

Irina Golochalova; Viorel Tsurcanu. Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems. J. Finance Account. 2020, 8(1), 48-58. doi: 10.11648/j.jfa.20200801.16

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AMA Style

Irina Golochalova, Viorel Tsurcanu. Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems. J Finance Account. 2020;8(1):48-58. doi: 10.11648/j.jfa.20200801.16

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@article{10.11648/j.jfa.20200801.16,
  author = {Irina Golochalova and Viorel Tsurcanu},
  title = {Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems},
  journal = {Journal of Finance and Accounting},
  volume = {8},
  number = {1},
  pages = {48-58},
  doi = {10.11648/j.jfa.20200801.16},
  url = {https://doi.org/10.11648/j.jfa.20200801.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20200801.16},
  abstract = {The purpose of this study is to establish the ability to assess the quality of financial statements presented by organizations in a particular jurisdiction. The preparation of useful financial statements is possible based on the imperativeness of the concept of qualitative characteristics. An analysis of the composition and grouping of qualitative characteristics outlined in the Conceptual Framework for Financial Reporting, Directive 2013/34/EU and the Law of the Republic of Moldova (RM) “On Accounting and Financial Reporting” made it possible to choose a method for developing a unified methodology for assessing quality of financial reporting in relation to accounting systems, both Anglo-Saxon and continental, as well as individual jurisdictions. A statement of the leading role of reliability and relevance in determining the usefulness of information, while maintaining the value of qualitative characteristics that increase the usefulness of information (in particular, comparability and timeliness), provided the opportunity to build a rational methodology for measuring the quality of financial statements. The proposed methodology is considered as the basis for assessing the quality of reporting, in the framework of which the value of the indicator of useful information is postulated. Based on mathematical modeling, a formula has been developed for calculating the indicator of the usefulness of information, with perfectly prepared financial statements, the value of which is 1. The use of the method of abstraction and logical thinking allowed us to determine the value of each qualitative characteristic in the quality indicator. It has been established that deviations from this indicator can be the result of either non-compliance with the information quality requirements by the reporting compiler, or ignoring the conceptual platform for presenting useful financial statements. Countries associated with the EU, including the RM, are forced to use a mixed system of accounting and qualitative characteristics (according to International Financial Reporting Standards and Directive 2013/34/EU). The implementation of the recommended methodology for measuring the quality of reporting, using the qualitative characteristics provided for in the legislative framework of the RM, proves the inefficiency of convergence of the two accounting systems in the absence of a special methodology. In general, the study demonstrated that the effective use of the concept of qualitative characteristics: is aimed at promoting the harmonization of accounting systems; serves as a reliable basis for assessing the quality of financial statements; contributes to solving the problem of improving the quality of information in the future.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - Measurement of Financial Statements Information in the Context of Harmonization of the Accounting Systems
AU  - Irina Golochalova
AU  - Viorel Tsurcanu
Y1  - 2020/02/18
PY  - 2020
N1  - https://doi.org/10.11648/j.jfa.20200801.16
DO  - 10.11648/j.jfa.20200801.16
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 48
EP  - 58
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20200801.16
AB  - The purpose of this study is to establish the ability to assess the quality of financial statements presented by organizations in a particular jurisdiction. The preparation of useful financial statements is possible based on the imperativeness of the concept of qualitative characteristics. An analysis of the composition and grouping of qualitative characteristics outlined in the Conceptual Framework for Financial Reporting, Directive 2013/34/EU and the Law of the Republic of Moldova (RM) “On Accounting and Financial Reporting” made it possible to choose a method for developing a unified methodology for assessing quality of financial reporting in relation to accounting systems, both Anglo-Saxon and continental, as well as individual jurisdictions. A statement of the leading role of reliability and relevance in determining the usefulness of information, while maintaining the value of qualitative characteristics that increase the usefulness of information (in particular, comparability and timeliness), provided the opportunity to build a rational methodology for measuring the quality of financial statements. The proposed methodology is considered as the basis for assessing the quality of reporting, in the framework of which the value of the indicator of useful information is postulated. Based on mathematical modeling, a formula has been developed for calculating the indicator of the usefulness of information, with perfectly prepared financial statements, the value of which is 1. The use of the method of abstraction and logical thinking allowed us to determine the value of each qualitative characteristic in the quality indicator. It has been established that deviations from this indicator can be the result of either non-compliance with the information quality requirements by the reporting compiler, or ignoring the conceptual platform for presenting useful financial statements. Countries associated with the EU, including the RM, are forced to use a mixed system of accounting and qualitative characteristics (according to International Financial Reporting Standards and Directive 2013/34/EU). The implementation of the recommended methodology for measuring the quality of reporting, using the qualitative characteristics provided for in the legislative framework of the RM, proves the inefficiency of convergence of the two accounting systems in the absence of a special methodology. In general, the study demonstrated that the effective use of the concept of qualitative characteristics: is aimed at promoting the harmonization of accounting systems; serves as a reliable basis for assessing the quality of financial statements; contributes to solving the problem of improving the quality of information in the future.
VL  - 8
IS  - 1
ER  -

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