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Information Asymmetry and Financial Statement (Asymetria informacji a sprawozdanie finansowe)

Author

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  • Edyta Mioduchowska-Jaroszewicz

    (Uniwersytet Szczecinski, Wydzial Nauk Ekonomicznych i Zarzadzania, Katedra Analizy i Strategii Przedsiebiorstw, Instytut Ekonomii)

Abstract

The aim of the article is to indicate aspects related to information asymmetry, the basic source of information in assessing the financial standing of enterprises, financial statements. In pursuing the goal of the article, the theories of economics related to information asymmetry were presented: signals, the order (hierarchy) of sources of financing, agency and market timing. The research on the quality of financial statements presented in the literature was characterized. In order to confirm the existing problem with asymmetry of information from financial statements, facts from economic life and signals of fictitious financial reporting were presented. The solution to the problem of information asymmetry lies in the creation of financial statements. First of all, the rules that currently exist allow too loose an approach to the statement of financial operations that give an unrealistic picture of the financial situation of companies. Special norms should be introduced which will eliminate the freedom existing in the regulations of the International Financial Standards. Perhaps we should strive towards FASB (US GAAP) regulations, which very specifically determine how to use particular tools for preparing financial statements. Secondly, all evaluators should take into account the so-called effective report analysis model. The article uses the methods of: deduction, analysis of literature and case study.

Suggested Citation

  • Edyta Mioduchowska-Jaroszewicz, 2018. "Information Asymmetry and Financial Statement (Asymetria informacji a sprawozdanie finansowe)," Research Reports, University of Warsaw, Faculty of Management, vol. 1(27), pages 45-53.
    • Handle: RePEc:sgm:resrep:v:1:i:27:y:2018:p:45-53
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    File URL: http://www.sim.wz.uw.edu.pl/sites/default/files/artykuly/edyta_mioduchowska-jaroszewicz.pdf
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    References listed on IDEAS

    as
    1. Leland, Hayne E & Pyle, David H, 1977. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Journal of Finance, American Finance Association, vol. 32(2), pages 371-387, May.
    2. Patricia M. Dechow & Richard G. Sloan & Amy P. Sweeney, 1996. "Causes and Consequences of Earnings Manipulation: An Analysis of Firms Subject to Enforcement Actions by the SEC," Contemporary Accounting Research, John Wiley & Sons, vol. 13(1), pages 1-36, March.
    3. Yuxiang Zhong & Wanli Li, 2017. "Accounting Conservatism: A Literature Review," Australian Accounting Review, CPA Australia, vol. 27(2), pages 195-213, June.
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    Cited by:

    1. Julija Bistrova & Natalja Lace & Ludmila Kasperovica, 2021. "Enterprise Crisis-Resilience and Competitiveness," Sustainability, MDPI, vol. 13(4), pages 1-24, February.

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    More about this item

    Keywords

    financial statement; financial condition of the company; information asymmetry; theories of economics;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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