Home  Journals  International Accounting  42(384) - 2015 November

Balanced scorecard: integration into the financial reporting system

Received: 5 November 2015

Accepted: 11 January 2016

Available online: 16 March 2016

Subject Heading: REGULATION AND STANDARDIZATION OF REPORTING

JEL Classification: 

Pages: 14-26

Importance In the current economic circumstances, corporate financial statements are an important source of information for taking managerial decisions, including strategic ones. Hence it gets more reasonable to integrate the balanced scorecard into the corporate financial reporting process.
     Objectives Drawing upon foreign expertise, I focus on the integration of the balanced scorecard into the corporate financial reporting process so to increase its information value and ensure effective management of the entity.
     Results The article demonstrates that the balanced scorecard helps improve conventional systems of internal reporting, without extending its volume. The balanced scorecard provides for the preparation of reports in special forms. The balanced scorecard-based system should timely furnish executives with meaningful information for managerial decisions, being sufficiently specified and understandable. The financial statements, which are based on the balanced scorecard, include two types of reports, i.e. documented strategy of the department and the strategy implementation report.
     Conclusions and Relevance I conclude that the balanced scorecard, if integrated into the corporate financial reporting, will help determine strategic goals of the entity more effectively, arrange activities needed to achieve the goals and promotes their successful implementation, thus enhancing the corporate governance system.

Keywords: balanced scorecard, financial reporting system, integration

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