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The Algorithm For Recognizing The Results Of Esg-Behavior Of Business In Financial Reporting In The Context Of The Imperative Of Its Transition To The Socio-Economic Model

Author

Listed:
  • Irina GOLOCHALOVA

    (Moldova State University, MD2009, Republic of Moldova)

  • Maria COJOCARU

    (Moldova State University, MD2009, Republic of Moldova)

Abstract
The research aims to develop a conceptualized approach to presenting information about the ESG-activities of businesses in financial reporting, considering the imperative of transitioning to a socio-economic development model. This research is conducted based on general scientific and specific methods, including comparative analysis, abstraction, and modeling. During the research process, the following steps were taken: analyzed the current trend in Moldova’s reporting system concerning the disclosure of information related to business ESGbehavior; identified that the conceptual framework for an innovative approach to financial reporting is based on bridging financial reporting theory with the concept of social responsibility; established a criterion for transforming vague social responsibility into business ESG-obligations and their recognition as part of accounting entities; compared different ways of influencing the impact of a business’s ESG-contribution on its capital size and overall cost; developed a 3-stage algorithm for presenting information on a business’s ESG-performance in its reporting. The research conclusions include the following: The qualification of Moldova's economy as developing and the state policy of stimulating business as taxpayers are crucial factors that have determined the trend of the national reporting system regarding the disclosure of information on business ESG-contributions to achieve sustainable development goals. The recognition of the outcomes of ESG-behavior of socially responsible businesses as components of accounting entities is contingent upon the authority vested in stakeholders concerning the business's associated ownership. The method of influencing the value of a business through ESG-obligations depends on its recognition as part of the financial reporting elements. Keywords: Socio-economic model of reporting; information usefulness; socially responsible business; accounting methodology; ESG-indicators.

Suggested Citation

  • Irina GOLOCHALOVA & Maria COJOCARU, 2023. "The Algorithm For Recognizing The Results Of Esg-Behavior Of Business In Financial Reporting In The Context Of The Imperative Of Its Transition To The Socio-Economic Model," European Journal of Accounting, Finance & Business, "Stefan cel Mare" University of Suceava, Romania - Faculty of Economics and Public Administration, West University of Timisoara, Romania - Faculty of Economics and Business Administration, vol. 11(3), pages 3-15, October.
    • Handle: RePEc:scm:ejafbu:v:11:y:2023:i:3:p:3-13
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