Elene Kharabadze, Ioseb Mamukelashvili

(Ivane Javakhishvili Tbilisi State University, 0186 Tbilisi, Georgia)

 

Abstract: This paper examines the influence of financial reporting and the enforcement of accounting standards on financing opportunities through cross country analyses based on data published in the Global Competitiveness Index by the World Economic Forum. Consistent with our expectations, battery of tests illustrate that countries with robust financial reporting practices and adequate accounting enforcement, particularly indicated by the strength of reporting and auditing standards and regulation of stock exchanges, tend to have more developed securities exchanges and firms in these countries are capable to easily access various forms of financing, such as loans and venture capital. However, our results indicate that equity capital, particularly stock market financing, is most sensitive to financial reporting. We conclude our research by descriptively analyzing financial reporting patterns for joint stock companies listed on the Georgian Stock Exchange.

 

 

Key words: financial reporting; accounting standards; assurance; securities regulation; Georgian joint stock

companies

 

JEL codes: M40, D82, G10