Qualitative characteristics of business reporting: A historical perspective

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Abstract

This paper aims to provide a historical review of several leading documents in relation to the objectives of financial statements. Four main documents were discussed, analyzed and compared, using the content analysis approach. These documents are The Trueblood Report (1973), The Corporate Report (1976), Making Corporate Reports Valuable (McMonnies, 1988), and Guidelines for Financial Reporting Standards (Solomons, 1989). These documents were selected because they have been described as milestones in addressing qualitative characteristics of financial and business reporting. The historical review showed that the basic objective of financial statements is concerned with providing useful information for economic decision-making. In addition, it emphasized that information is useful when: 1) it shows the economic reality of the financial statements (i.e., balance sheet, income statement, and cash flow statement); and 2) it is relevant and reliable to users.

Keywords: Trueblood Report, Corporate Report, MCRV, Solomons, Relevance and Reliability, Economic Reality

Authors’ individual contribution: Conceptualization — V.V. and Y.S.; Methodology — Y.S.; Software — V.V. and Y.S.; Validation — V.V. and Y.S.; Formal Analysis — V.V. and Y.S.; Investigation — Y.S.; Resources — V.V. and Y.S.; Data Curation — V.V. and Y.S.; Writing — V.V. and Y.S.; Visualization — V.V.; Supervision — V.V. and Y.S.; Project Administration — V.V. and Y.S.; Funding — V.V.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G30, G19

Received: 11.03.2021
Accepted: 01.06.2021
Published online: 03.06.2021

How to cite this paper: Verma, V., & Shahwan, Y. (2021). Qualitative characteristics of business reporting: A historical perspective [Special issue]. Corporate Ownership & Control, 18(3), 360–366. https://doi.org/10.22495/cocv18i3siart10