EVALUATION OF RELATED PARTY DISCLOSURES IN FINANCIAL STATEMENTS PREPARED ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

Abstract

The disclosure of related parties in financial statements is a crucial aspect of corporate transparency and accountability. International Accounting Standard (IAS) 24 establishes the requirements for identifying and reporting related party transactions to ensure financial statement users can assess potential conflicts of interest and financial risks. This study evaluates the effectiveness of related party disclosures in companies listed on NASDAQ Vilnius, focusing on compliance with IAS 24 requirements. The research employs content analysis of financial statements from 2019 to 2023, using qualitative and quantitative assessment criteria. The findings reveal significant variations in disclosure quality among companies, with stronger compliance in related party identification and guarantees but weaker disclosure of management compensation and transactions with state-owned entities. The results highlight the need for stricter regulatory oversight and improved corporate reporting practices to enhance financial transparency and investor confidence. The study contributes to the understanding of disclosure practices and offers recommendations for improving financial statement transparency in line with international standards.