Financial and Fiscal Reporting, the Effect on the Financial Statements: The Case of Vlora

Abstract

Understanding and analyzing accounting and fiscal reporting practices is by no means simple, as they are characterized by complexity and ongoing dynamics. The relationship between accounting and fiscal reporting and the correlation that exists between them is one of the most debated and analyzed phenomena worldwide. It is an early relationship that has evolved over time and has often been accompanied by discussions about its convergence and divergence. The fiscal system has also undergone numerous changes, which has given its impact on the reporting of economic entities. These changes are an integral part of the process of reforming the fiscal system, which has faced many challenges, which definitely require high efficiency and effectiveness, led by the aspiration to be as close as possible to European standards. Often these changes in the fiscal system have not provided scope or do not converge with the accounting rules, which have served as the beginning of the creation of dual models of accounting and fiscal reporting. In this paper, both primary and secondary data were used. Primary research was based on quantitative research through the distribution of questionnaires and qualitative research through interviews with financial experts of entities and tax administration officials. On the other hand, economic development and the intention to be part of European countries, has brought the need for global integration of the capital market. Global investors are interested in cross-border financial reporting, making it a necessity to implement International Accounting Standards and adapt them to the spaces created by our country. The information needs of global investors have forced accounting professionals and institutes to work for harmonization. The result of the work is the construction and testing of an important conceptual model that dictates the potential factors of creating differences in reporting, as a result of dual reporting models. Therefore, there has long been a need for companies around the world to communicate using a common accounting language. Country-specific principles are so diverse that the aspiration for an integrated global capital market can only be fulfilled through a uniform financial reporting code.