“Financial Information Quality Across the Capital Markets Positioned at

Different Levels of Development”

Project objectives

The objective of this research project is to show how financial information quality varies across the capital markets positioned at different levels of development.

Project activities and outcomes

On the surface, financial reporting only enters the calculations of many in terms of its technical functionality. A more rigorous exploration, however, helps to conceptualize it as an integral component of business operations, market dynamics, and the economy in general. Financial reporting embodies a deep utility as pertains to the creation of overall welfare as investors base their investment decisions on the reported financial information. While the early wave of 19th century on disclosure regulation focused on the mandatory preparation of financial statements based on historic cost, a new wave of thinking started on the premise that financial reporting’s primary goal is the information of existing and potential investors on the value of the enterprise. There is a consensus that high quality decisions on the allocation of capital improve the overall performance of an economy and that investors need to base their decisions on reliable financial information. However, it is by no means clear how investors are best informed about the value of their investment. This may be done by high quality financial statements, but how the reliability of financial information varies across capital markets positioned at different levels of development still remains to be elusive.

Project starting and finishing dates: 01.02.2016 – 31.08.2017

Coordinator University: Caucasus University, Georgia

The list of Project Partner Universities: University of Bremen

Principal Investigator: Prof. Dr. Erekle Pirveli