Auditor’s Contribution to Non Quantitative Information

Abstract

The purpose of this research is to determine, whether an auditor, by conducting the statutory audit of the companies’ financial statements, improves the non-quantitative information, which should be reported by companies. The companies’ financial statements, i.e. Balance Sheet, Profit and Loss Statement, Notes, are focused on
quantitative (financial) information, while Management Report is focused non quantitative information. In the context of this study we have examined to what extent a sample of 84 companies of the agricultural supplies sector, in Greece, complies with the requirements of Greek legislation, as determined mainly by laws 4548/2028, 4309/2024, 4336/2015 and circular 62784/2017, regarding non-quantitative information reporting, about the entity’s performance, business risks management, environmental and labor issues and if, ultimately, the auditor has succeeded in improving the non-quantitative information. We have evaluated the compliance of each company for the period 2019 2022, comparing the information reported by Management Reports with the information required by Greek legislation. Regardless the auditor involvement, the presentation of non-quantitative information has been improved. The overall average reporting rating of all companies, subject, or not subject to audit, shows a continuous improvement. The auditor involvement has improved significantly the non-quantitative information. The average reporting ratings of audited companies are higher than the corresponding ratings of non-audited companies and this trend is observed in all four reporting pillars.

JEL Classifications: Q56, M10, M14, M41, M42, M48
Keywords: Audit, Compliance, Management Report, Non-Quantitative Information