Empirical Study of the Degree of Knowledge of Standards and References in Financial Information - Case of Albania
Year: 2025
Type: article
Abstract: The quality of financial reporting is a crucial determinant of economic transparency, particularly for small and medium-sized enterprises (SMEs) operating in emerging markets, which are the main economic contributors in the respective markets and whose level of financial reporting quality usually is lower than that of bigger firms. This study investigates the state of financial reporting knowledge among medium-sized enterprises in Albania, focusing on their compliance with financial standards, challenges encountered, and the broader implications for the Albanian economy. Findings reveal that while many small and medium-sized enterprises demonstrate a basic understanding of financial reporting requirements and rules, significant deficiencies persist, particularly in smaller and less formalized enterprises. Limited access to professional expertise and inconsistencies in regulatory enforcement exacerbate these challenges, hindering small and medium-sized enterprises' ability to produce accurate and compliant financial statements. As financial reporting evolves in a rapidly changing technological landscape, knowledge of frameworks like eXtensible Business Reporting Language (XBRL), the General Data Protection Regulation (GDPR), the Digital Operational Resilience Act (DORA), the IFRS Taxonomy, and emerging standards like the AI Act and the Corporate Sustainability Reporting Directive (CSRD) is becoming increasingly essential for businesses to ensure transparency, accuracy, and compliance. The study highlights the need for targeted educational initiatives and regulatory reforms to improve financial literacy and enhance reporting practices. This research contributes to the field by offering insights into the unique challenges faced by small and medium-sized enterprises in Albania, providing a foundation for policymakers to design interventions aimed at strengthening financial transparency and corporate governance. Practical implications include the potential for improved financial statement accuracy to attract investment and foster economic growth. Socially, the study underscores the role of transparent financial reporting in building trust within Albania's corporate ecosystem. Future research should consider longitudinal studies to track the impact of regulatory changes and educational programs on financial reporting practices.
Institution: University of Tirana
Language: English
Topic: Financial Reporting and XBRL
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4409274183