What are the metrics to measure a company’s financial transparency?
Financial report transparency is a core dimension for investors and regulators to evaluate the quality of corporate information disclosure. This article systematically reviews the main indicators that can be used to quantitatively compare the financial transparency of two companies, including timeliness of disclosure, consistency of accounting policies, type of audit opinion, degree of earnings management, breadth of non-financial information disclosure, etc., and emphasizes that the selection of indicators should be combined with industry characteristics and the institutional environment.
The question is about financial reporting transparency:
What are the possible measures of financial reporting transparency? If one wants to compare two companies based on the transparency of their financial reports, what are the possible measures that can be used?