The modern approach to business reporting in the function of satisfying the information needs of stakeholders-review of Montenegro

Abstract

The business environment in which the reporting entity performs its activity has undergone, and is still going through, signifcant changes created due to the in?uence of a large number of factors. In such, changed circumstances of doing business, the traditional approach to fnancial reporting has no strength to respond to a satisfactory degree to the increasing demands of the balance sheet addressees. In fact, the users of the reports demand more complete information, reinforced by non-fnancial content, that have a strategic dimension and are in addition future oriented. It is clear that the existing information o?er cannot satisfy the needs of interested groups – stakeholders; therefore, many companies had engaged in a transformation of the classic model of fnancial reporting and created a new, integrated approach to fnancial reporting. In the context of the aforementioned, the goal of this paper is to point to the: a) informational powerlessness of the traditional system of fnancial reporting in the function of creation and maintenance of values for the stakeholders; b) the need to create a more comprehensive approach that integrates the fnancial aspect of the business with all the relevant information, strategies, risks and the ecological, social and economic dimension of the business; c) the reached level of fnancial reporting in Montenegro as well as to provide a review of the (in)achievements with regards to the latest evolutionary stage in the corporate reporting of the companies in Montenegro.