Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


The Relationship between Financial and Fiscal Reporting Under the Income Perspective

Author(s): Nexhmie Berisha Vokshi

Robust financial reporting systems of business organizations contribute to financial stability and spur increased confidence and transparency. Along with financial reporting, business organizations’ fiscal reporting is also a very important and highly influential element. Accounting and tax purposes and requirements are not always the same: accounting involves the preparation of information for the purpose of decision-making, while the purpose of taxation is to collect income and to be used as a governmental economic instrument. This results in a very important and focal point for this study: analyzing the relationship between financial reporting and fiscal reporting in Kosovo under the influencing elements and legal framework related to their reporting, with particular emphasis on income financial reporting and income tax. The paper was structured in three sections, starting with the literature review, the regulatory framework for reporting income for accounting and fiscal purposes, and empirical analysis of the relationship between financial reporting of income and their fiscal reporting. The research is quantitative and the research sample consists of 264 businesses with turnover of over 1 million€. Data was conducted through a questionnaire filled out in businesses and addressed to accountants (one employee in each business, total of 264 accountants interviewed), and were processed through descriptive statistics and quantitative analytical method. The study reflected the current situation on reporting requirements regarding income under accounting and fiscal legislation, providing us with the reality that businesses face in relation to the two reporting areas, and that there is a correlation between accounting and taxation, in which accounting is prevalent. As the research findings show that there is a correlation between accounting and fiscal rules when recording and reporting income, this leaves room for further research in order to study the process of harmonization of both accounting and fiscal regulations.

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