Economic Consequences of Non Financial Information Disclosure

Running head: FINANCIAL ACCOUNTING
Financial accounting
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FINANCIAL ACCOUNTING
Executive summary:
The report is prepared to demonstrate an understanding of the economic consequence of the
disclosure of the non financial information. In this regard, the nature of the economic
consequences and non financial information has been identified. The report also outlines the
manner in which the non financial information should be reported. For the analysis purpose,
some of the journal articles evaluating the impact of the corporate social performance
disclosure on the value of firms, stock price and cost of equity capital has been evaluated and
reviewed. It has been ascertained from the review of articles that the non financial
information disclosure has significant economic impacts.

FINANCIAL ACCOUNTING
Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................5
Identification of the nature of non financial information:..........................................................5
Identification of nature of economic consequences:..................................................................6
Discussing on the reporting of non financial information:........................................................7
Identifying the economic consequences of non financial information reporting:......................8
Conclusion:..............................................................................................................................10
Reference list:...........................................................................................................................12
Introduction:
The objective of report is to demonstrate the economic consequences of non financial
reporting by evaluating the nature and importance of non financial information. In addition to

FINANCIAL ACCOUNTING
this, the current paper also conducts an investigation on how the reporting of non financial
information should be done. Non financial information is the information regarding the social
and environmental performance of the company. In light of the growing importance of the
disclosure of non financial information, the standard setter has placed reliance on the non
financial reporting by the listed entities. It has been widely recognized that there is increasing
recognition of social, environmental and governance information. Non financial information
disclosure is considered as a way for improving the long term performance, competitiveness
and management of risk (Omran & Ramdhon, 2015).
Discussion:
Identification of the nature of non financial information:
Non financial information is the information and data relating to the non financial
aspects of the performance of company. Such information include social, employee, ethical,
environmental matters, sustainability goals and measurements that are based on the strategy
of company. In recent years, most of the stakeholders have expressed concern over the
considerable rise in non financial reporting. Disclosure of the non financial information helps
in improving the transparency and performance of the companies on social and
environmental matters. The non financial information which the company discloses in their
financial report includes social and environmental matters. This includes employee and social
related aspects, diversity on board of directors, bribery issues and anti corruption and respect
for human rights. Non financial discourse by the reporting organization include qualitative
and quantitative on the policies, strategies and the activities that are used to pursue the
business, social and environmental goals (Ioannou et al., 2012). The platform for disclosing
the non financial information is through the preparation of sustainability report that discloses
matters on the overall environmental and social performance of the company.