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OPINION ON THE PAST RESEARCH ON RELIABILITY OF FINANCIAL STATEMENT - PRESENT POSITION AND PERSPECTIVES
Abstract
Reliability of financial statements is crucial when judging the relevance of financial information created in accounting information system. Although the importance of the problem has been raised many times in the literature, the matter has not been explored very well. Broadly admitting that financial reports should be reliable, there is limited literature on reliability definition. Few attempts to define reliability were based on conceptual framework created by International Accounting Standard Board. On the other hand, literature analysis presents the changes in the characterization of reliability formed on the transformation of scope and course of previous researches. Previous studies represent diverse collection and consist mainly of selected problems concentrating on earnings management. A few studies were directed at selected reliability determinants' investigation (maximum of 2 or 3 determinants in one study) in the context of financial reports' information quality. At the same time, very sophisticated methods of earning management are used in order to realize well-bred and complicated financial strategies that are hard to fairness judgment. Methods used in the article include worldwide literature analysis together with the study of accountancy theoretical background directed at earnings management. The qualitative mixed-methods are employed with broad emphasis on critical research, in-depth examinations of accountancy foundations, and interpretive techniques referring to smoothing of financial reports. The aim of the study is twofold. Firstly, authors present the review of previous literature on reliability of information disclosed in financial statements and describe the status of up-to-date researches. Secondly, the desired direction for the future research is indicated in the area of reliability characterization and reliability determinants' classifications. Our article contributes to understanding about fairness in accounting showing past confusions about characterization of the reliability and pinpointing future areas of reliability research.
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