Timeliness of financial information in Georgia: when legislative and market incentives are in conflict.

In the midst of competition from various information sources like press releases, analyst forecasts, technical/algorithm-based analysis, and conference calls, the significance of financial information has heightened. Given the given competition, to uphold its high informational value, financial information must be disclosed promptly. Ensuring the prompt release of financial information plays a crucial role in mitigating information asymmetry between a company's management and external users, fostering market integrity, fairness, efficiency, transparency, and investor protection. This research project delves into the timing of corporate financial information disclosure within the framework of developing Georgia, where the entire business sector is required to disclose financial statements based on international financial accounting standards in the absence of capital markets. Although the country has achieved a high level of reporting disclosure (90%), this study examines the timeliness of the reporting process, which has been questioned by previous studies. The analysis includes thousands of large, medium, small and micro enterprises of the private sector of Georgia. By analyzing the mean/variance deviation of corporate disclosure filing dates and the distribution of reporting disclosures around the mandatory date, as well as developing a regression model, this study will attempt to reveal: a) relative proportions of timely and untimely disclosure of accounts; b) the timeliness of reporting disclosure depends on legislative or market incentives; c) whether mandatory and voluntary submission of reporting affects the timeliness of information submission; and d) the role of audit report, audit report type, and audit firm type on the timeliness of local corporate information disclosure. The findings from this research will be the first in exploring the mentioned issue within Georgia. It will enhance scientific knowledge and provide valuable insights for the local regulator, as well as potential or existing investors and creditors, enabling them to make informed and effective decisions.

The project is funded by the Shota Rustaveli National Science Foundation of Georgia grant for research of young scientists within the framework of the 2022 state scientific grant competition. The head of the project is Erekle Pirveli.