Financial Reporting in Post-Conflict Economies: Institutional Challenges and a Proposed Accounting Framework for Enhancing Disclosure Quality

Abstract

Objectives: The current study explores the issues that are implicit to financial reporting in post-conflict economies and specifically focuses on institutional weaknesses and applicability of International financial reporting standards (IFRS) in situations of instability. Prior Work: The current research adds to the academic body of literature because it provides a holistic view that fills the gap between institutional vulnerability and financial reporting issues, as well as proposes a practical approach that fits the needs of post-conflict settings. Approach: The study uses descriptive-analytical research methodology by using prior academic works to explore the interaction between the financial reporting practices and institutional conditions. Results: The findings show that geopolitical instability and institutional shortcomings seriously hinder the consistent implementation of IFRS that breeds increased variability of accounting activities, lack of transparency, and lack of comparability of financial reports. Implications: To overcome these issues the current research will suggest a combined accounting model which will interrelate the institutional factors, accounting arises, and the suitable reaction to improve the quality of disclosure and reliability of reporting. Value: The results are an indication of the significance of the accounting standards with the institutional reality hence improving the quality of transparency and efficient decision-making in weak economies.