Professional Competence, Due Care and Financial Reporting Quality: Stakeholders Perception

Abstract

adopting a stakeholders-oriented approach to understand this relationship. A survey approach was employed to gather data from investors, analysts, auditors, regulators and management. The study was analyzed using descriptive statistics, confirmatory factor and path analysis, also used for the analysis is regression. The research findings show that stakeholders view on professional competence and due care have a significant bearing on the quality of financial reporting. Specifically, due care and continuing professional development are deemed essential for ensuring accurate, transparent and reliable financial reports. This study reveals that stakeholder assess financial reporting quality based on factors such as compliance with regulations, clarity of financial disclosures, auditor’s opinion and corporate governance. The results also indicated that poor professional competence and financial reporting quality can lead to loss of investor confidence, decreased market value, regulatory penalties and reputational damage. The research contributes to extant literature by providing insights into stakeholders’ perception on professional competence and due care and financial reporting quality. The findings have implications for professional organizations, regulatory bodies and companies highlighting the need for ongoing training, enhanced corporate governance and independent audit committees to ensure high-quality financial reporting..

Keywords:       Professional Competence and Due Care, Financial Reporting Quality, Stakeholders’ Perception, Ethical Code, Accountant