TITLE:
The Contribution of Management Commentary Index (Ma.Co.I) in Annual Banking Reports (ABR) and the Chronicle of the Great Greek Crisis
AUTHORS:
Alexandros Garefalakis, Augustinos Dimitras
KEYWORDS:
IFRS, Annual Banking Reporting Quality, Management Commentary, Ma.Co.I
JOURNAL NAME:
Theoretical Economics Letters,
Vol.6 No.5,
September
23,
2016
ABSTRACT: The research explores the extent to which the
implementation of International Financial Reporting Standards (IFRS) in the
Greek banking sector has affected its financial and narrative reporting between
the periods prior (2002-2004) and after (2005-2010) the implementation of the
IFRS. In particular, we examine the relation between Price per Share (P),
Earnings per Share (EPS) and the Book Value (BV) per share using data from
listed banks of Athens Stock Exchange (ASE). Further, the change of the narrative
reporting quality of the Greek banking sector is studied along with the key
financial indicators trends between the two above periods. Moreover, we
investigate the disclosure quality of narrative information of annual reports
for the period after the Greek financial crisis (i.e. from 2008 to 2010). Finally, we assess the relation between
the key financial indicators and Management Commentary (MC). The findings
indicate a positive relationship between P, BV and EPS after the first period
of IFRS adoption (i.e. from 2005 to
2007). In addition, we report that MC has been considerably improved in the
same period, while a positive impact in the key financial Indicators has been
observed. Furthermore, empirical evidence specifies that Debt tends to be the
most important indicator of Management Commentary. Finally, in the beginning of
Greek crisis period the disclosure quality of narrative portion of annual
reports are lower except. An important innovative characteristic of the above
results is that the Management Commentary Index (Ma.Co.I) is able to measure
the actual quality of Annual Banking Reports (ABR) and provide a reliable and
unique tool for the investors.