The timeliness of financial reporting: A comparative study of selected EU and transition economy countries

Abstract

Timeliness of financial reporting is an attribute of good corporate governance. Shareholders and other stakeholders need information while it is still fresh, and the more time that passes between year-end and disclosure, the more stale the information becomes and the less value it has. Corporate governance is a relatively new concept for transition economies. Prior to the fall of the Berlin Wall and the collapse of the Soviet Union there were no profit-making corporations, no shareholders and no need to report financial results except to the government. All those have changed. To raise capital, corporations need to convince potential investors that an investment in their company will be safe. This requires financial reporting standards that can be trusted and financial information that is reported in a timely manner. But the culture of former communist countries is not to disclose information. This mentality is changing as their formerly closed economies open up to investment from the West. © 2009 Springer US.