Financial Reporting Practices

Financial reporting plays a critical role in ensuring transparency, accountability, and strategic decision-making in both public and private sectors. In the Philippines, however, varied levels of compliance with generally accepted accounting principles (GAAP), limited audit oversight, and evolving non-financial reporting standards have created inconsistencies that impact stakeholder trust and institutional sustainability. These inconsistencies are especially evident among cooperatives, non-profit organizations, SMEs, and emerging sectors like cryptocurrency. As the global economy shifts toward stricter environmental, social, and governance (ESG) disclosure requirements, Philippine firms and public entities must respond with robust, standardized, and ethical financial reporting systems. Studying current practices offers a pathway to improve financial literacy, regulatory compliance, and sustainable business operations.

Who Can Use These Topics

This research is ideal for students and professionals pursuing the following courses or strands:

College Programs:

• BS in Accountancy

• BS in Management Accounting

• BS in Business Administration (Major in Financial Management)

• BS in Internal Auditing

• BS in Public Administration

• BS in Economics

• BS in Cooperative Management

Senior High School Strands:

• Accountancy, Business, and Management (ABM)

• General Academic Strand (GAS)

Why This Topic Needs Research

While the literature on financial reporting is expanding, several critical gaps remain in both theory and practice:

• Inconsistent application in non-profit organizations (NPOs): Research revealed that NPOs in Bulan followed inconsistent financial practices without strong adherence to GAAP, but did not evaluate how these inconsistencies affect stakeholder trust, funding sustainability, or governance decisions (Bongalonta & Bongalonta, 2023).

• Limited variables in assessing audit committee effectiveness: While audit committee independence and competence improved reporting quality, the study did not consider contextual variables like honorarium, transparency practices, or cultural influences in cooperative settings (Nay-ud, 2022).

• The paradox of transparency in developing economies: Audited financial statements were shown to increase corruption risks when institutions are weak, yet research failed to explore how institutional reforms could mitigate these risks (Liu et al., 2021).

• Low-quality mandatory non-financial reporting: Though mandated disclosures aim to improve transparency, some studies found they led to boilerplate reports and increased information asymmetry. Regulatory mechanisms to address these flaws were not fully explored (Breijer et al., 2025).

• Unmeasured long-term impact of ESG adoption in SMEs: While ESG frameworks were introduced to guide sustainability reporting, their actual effect on operational and financial outcomes—especially across industries—remains under-researched (Bidoia, 2024).

• Cryptocurrency reporting lacks standardization: Despite global uptake of digital assets, inconsistent GAAP and IFRS application in crypto reporting has yet to be resolved. How this affects investor confidence and financial comparability was not addressed (Luo & Yu, 2024).

• Short-term focus in sustainability reporting studies: Studies in Philippine firms identified initial financial impacts of ESG practices but did not assess long-term outcomes or moderating factors like regulatory maturity and industry type (Chua & Byun, 2024).

Feasibility & Challenges by Target Group

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References

Bidoia, G. (2024). Non-financial reporting impacts the SMEs-Sustainability reporting practices for Small and Medium Enterprises.

Bongalonta, M., & Bongalonta, M. (2023). Financial Reporting Practices of Non-Profit Organizations (NPOs) in the Municipality of Bulan. Sorsogon Multidisciplinary Research Journal, 2(1), 1-20.

Breijer, R., Erkens, M. H., Orij, R. P., & Vergoossen, R. G. A. (2025, March). Mandatory versus voluntary non-financial reporting: reporting practices and economic consequences. In Accounting Forum (Vol. 49, No. 2, pp. 303-335). Routledge.

Chua, K. T., & Hae-Young, B. (2024). Impact of sustainability reporting initiatives on the financial performance of Philippine listed companies. Environmental Economics, 15(1), 130.

Liu, T., Liu, Y., Ullah, B., Wei, Z., & Xu, L. C. (2021). The dark side of transparency in developing countries: The link between financial reporting practices and corruption. Journal of Corporate Finance, 66, 101829.

Luo, M., & Yu, S. (2024). Financial reporting for cryptocurrency. Review of Accounting Studies, 29(2), 1707-1740.

Nay-ud, M. (2022). Audit committee effectiveness towards quality of financial reporting of cooperatives in Northern Philippines. International Journal of Management & Entrepreneurship Research, 4(2), 119-130.

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