Determining the relation between financial reporting and employment creation in the framework of BCG matrix

Abstract

The best financial reporting system for the consistency of the benefits of the manager and stock holder is not the best financial reporting system to give information to the users of financial statements. Today, in Iran the government is considered as one of the common users of the financial reports of the enterprises. Based on the emphasis of the government on employment creation in the commercial enterprises and the dependency of governmental financing on employment creation from the enterprises for the benefit of the government, the financial reports should present the direct or indirect employment creation during the financial period. This is determined in the framework of BCG matrix by social accounting instrument. The present study attempted to express the relation between employment and BCG matrix and financial reporting, the way to give direction to the strategic decisions of the managers to employment creation and its presentation in financial reports. It was shown how to use a management tool for external organization reporting. It was proposed to formulate the required standards for financial reports based on social needs to pave the way to achieve an administrative, financial system.