The purpose of this research is to identify and analyse the determinants influencing non-financial reporting among Lithuanian companies, focusing on both mandatory and voluntary disclosures. The research tasks include identifying trends and assessing the impact of various determinants on the level of disclosure, such as company size, leverage, profitability, asset turnover and the reporting framework used. This approach provides an in-depth understanding of the country’s recent practice of mandatory and voluntary non-financial reporting.
The study analyses non-financial information reports of companies from 2017 and 2022. The target population includes the largest Lithuanian companies by revenue, with a sample of 20 companies reporting mandatory non-financial information according to European Union (EU) Directive 2014/95/EU and 20 companies reporting voluntarily. The research methods used in this study include content analysis, descriptive statistics, statistical analysis and regression analysis. Content analysis is used to evaluate the extent and quality of disclosures, while statistical methods are applied to identify significant determinants and trends.
The findings reveal that companies increased the information disclosure in all researched areas. Companies applying Global Reporting Initiative (GRI) or GRI in combination with the UN Global Compact demonstrate a statistically significant positive influence on specific disclosure. The industry in which a company operates has a significant impact on disclosure quality. The company’s size, measured as total assets, has a significant positive impact on disclosure quality, but leverage, profitability and operational efficiency, measured as an asset turnover, had no statistically significant effects.
In recent years, non-financial reporting has gained significant importance in corporate communication and stakeholder engagement. This study examines the determinants of mandatory and voluntary non-financial reporting practices in Lithuanian companies, addressing a crucial gap in the literature on sustainability disclosure in small Central and Eastern European markets. As Lithuania aligns its regulations with European Union (EU) directives, understanding the current state and determinants of non-financial reporting becomes critical for policymakers, companies and stakeholders.
