The crisis and the future of financial reporting. Global financial reporting standards - reality or utopia

Abstract

Summary:

Contemplating and exploring the fundamental issue regarding the future of financial reporting, a matter more controversial than ever before, one cannot overlook phenomena and processes which have a very strong impact on the development of the world today and outline the aspect of passing and coming decades. Therefore, essential problems of contemporary life today stand out in the present research. Each of these problems can be the subject of scientific research or public debate, because it is significant and may have important economic, accounting and socioethical aspects and long-term consequences for the economic and social development. The combined and well-coordinated efforts on the way towards solving these problems may contribute to a remarkable outgrowth for the present and future generations and to an adequate response to the challenges facing mankind. The belief is that the simultaneous analysis of these problems would underline and confirm their intricate interrelation (the key aim of this research), thus rendering the debate on the future of financial reporting more meaningful and constructive.

The debate would most probably promote the standpoint we personally maintain which is also endorsed by an increasing number of supporters in Europe and around the world, implying in particular that apart from a process of unification, what is also necessary is a change in the philosophy and culture of reporting and presentation of the financial state and the significant effects and impacts of the activity, as well as a general understanding of the broader and far-reaching goals which it must be subordinated to – today and in the future. It is expected that this will provoke speculations and ideas towards further research as well as provide a reference point for the right way to be pursued.

The terminology of the research is predominantly in the field of financial accounting and reporting under the International Accounting Standards (IAS)/ International Financial Reporting Standards (IFRS). The structure of the research is subordinated to an author's objective to justify in the appropriate manner the contemporary necessity for changing the paradigm and introducing a new holistic approach to the reporting of an enterprise's activity with all its essential aspects and effects (including nonfinancial ones). The applied heuristic methods of knowledge (analysis and synthesis, induction and deduction, comparison, analogy, observation, descriptive method, etc.) are generally accepted for scientific research in the respective field and are frequently used by authors, which is due to their universal nature and the predictable results that could be achieved. A wide range of specialized scientific literature (including Bulgarian and foreign resources) and empirical data have been investigated by the author for the purposes of this research.