Quality of financial information

What is it about?

This article explores what makes financial information reliable and high quality in today’s global business environment. From this review, the study identifies three main levels of influence: • At the company level, good corporate governance, honest reporting practices, strong auditing, and oversight by banks improve financial information quality. • At the country level, strong legal systems, regulations, and how companies are monitored by authorities play an important role. • At the international level, competition in global financial markets and how much a company operates across borders also affect transparency and reporting quality. Based on these findings, the paper suggests that managers should focus on being transparent, improving audits, and encouraging ethical behavior within their firms. It also recommends that regulators strengthen oversight and enforcement to prevent financial misconduct. Overall, the study brings together existing knowledge into one clear framework that explains what influences financial information quality.

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Why is it important?

This research is important for several key reasons: a) It supports trust in financial markets Reliable financial information is the foundation of healthy markets. Investors, lenders, regulators, and managers rely on financial reports to make decisions. When information is poor or misleading, it can lead to: Bad investment choices; Financial crises; and Loss of public trust. By identifying what improves financial information quality, the study helps strengthen confidence in global markets. b) It helps managers improve business practices The findings give clear guidance to company leaders on what they can do to improve reporting quality, such as: Strengthening corporate governance; Encouraging transparency; and Improving audit processes. This can lead to better internal decision-making and improved relationships with investors and stakeholders. c) It informs policymakers and regulators The study highlights the importance of strong regulatory systems and supervision. This is useful for governments and regulatory bodies when designing policies to: Monitor financial reporting; Enforce compliance; and Reduce fraud and manipulation. d) It brings scattered research together Before this paper, many studies examined financial information quality separately at firm, country, or global levels. This research is important because it systematically combines all these perspectives into one comprehensive framework. This makes it easier for researchers and practitioners to understand the full picture.

Perspectives