Financial reporting quality in Lithuanian state-owned enterprises

Abstract

The aim of the research is to assess the quality of financial reporting of state-owned enterprises in Lithuania. Having evaluated the methods of quality assessment of financial statements presented in scientific sources, it was identified that financial accounting quality is often defined in the literature considering its qualitative characteristics. In the paper, fundamental and enhancing qualitative characteristics and the chosen methods of assessment were briefly discussed. The selected method of data collection for research was a content analysis of financial statements in 2017. The indexes for the qualitative characteristics of each individual financial statement were calculated. After the analysis of qualitative characteristics of financial statements, it may be stated that 45.90 % of enterprises have a sufficient and 50.8 % of them an average quality of financial statements. The maximum and the mean values of faithful representation, understandability, comparability and timeliness also reveal similar results that the quality of information is more than average. The total quality index is positively related to the sum of assets, revenues and the number of employees of the enterprise. The state-owned enterprise size indicators (assets, revenues, number of employees) can be considered as the determinants which influence information disclosure in the financial statements. JEL Codes: M41, L15. DOI: https://doi.org/10.15544/ssaf.2019.05