Evolution of Corporate Reporting and Emerging Trends

• Published date: 01 May 2016
• DOI: http://doi.org/10.1002/jcaf.22157
• Date: 01 May 2016

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© 2016 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22157

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Evolution of Corporate Reporting

and Emerging Trends

Ali Uyar

INTRODUCTION

Corporate scan-

dals erupting in the

past two decades

have shaken inves-

tor confidence in the

capital markets. In

order to restore this

confidence, regula-

tory bodies have

taken some steps to

alleviate some of

this skepticism in the

minds of the users

of financial reports.

These regulations call

for more transparency and bet-

ter corporate reporting. Cor-

porate reporting is to disclose

financial and nonfinancial

results of a company to stake-

holders periodically by the use

of various tools. It used to con-

sist of only financial data until

the 1980s since the reporting

process was covering the pre-

sentation of financial informa-

tion and their complementary

footnotes. Nowadays, corporate

reporting includes nonfinancial

information along with finan-

cial data. Therefore, the utiliza-

tion of a more comprehensive

“corporate reporting” con-

cept is gaining momentum

which signifies a more holistic

approach in external corporate

reporting.

Corporate reporting is

important for effective func-

tioning of capital markets

since the information disclosed

in these reports are primary

inputs for decision making

by investors and others with

vested interests such as lenders

and dependent customers. The

subject is particularly signifi-

cant for emerging markets since

they need to attract foreign

capital to finance

growth. More trans-

parency through cor-

porate reports opens

the way for capital

flow. Particularly in

the past two decades,

corporate reporting

has been undergo-

ing a transformation

from several per-

spectives: contents,

reporting tools, tar-

get audience, report

types, design and so

on (Exhibit 1). Thus,

the evolution of cor-

porate reporting is elaborated

from these perspectives in the

following paragraphs based on

the work of Uyar (2015).

CONTENT

The contents of corporate

reports have undergone a tre-

mendous change; particularly,

nonfinancial reporting has

improved a lot in the past two

decades. In addition to finan-

cial information, disclosure

of nonfinancial information

is the trend among business

organizations. Reporting of

Corporate reporting is undergoing a tremendous

evolution; it is evolving from mere financial report-

ing to including both financial and nonfinancial

information. The improvement in corporate report-

ing is of importance for all stakeholders since it

enables a reporting entity to become more trans-

parent and accountable. Particularly, in the last

two decades, corporate reporting has been under-

going a transformation from several perspectives:

contents, reporting tools, target audience, report

types, design, and so on. Thus, the evolution of

corporate reporting is elaborated from these per-

spectives in this article. © 2016 Wiley Periodicals, Inc.

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