LIMITATIONS OF FINANCIAL DISCLOSURE: CASE OF BANK SNORAS BANKRUPTCY

Abstract

The objective of this paper is to assess if publicly financial disclosed information was relevant and reliable to predict bankruptcy of the bank Snoras. To assess financial information about the bank Snoras, an analysis of public disclosure by various sources: the entity itself, auditors, regulating bodies, and mass-media prior to the bank Snoras bankruptcy announcement has been conducted.
The results of the research reveal that the bank Snoras financial difficulties and nationalisation emerged unexpectedly neither to general public nor to professionals. In the case of the bankruptcy of the bank Snoras we conclude that financial disclosures by various sources were neither sufficient nor timely. Reliable information sources have not disclosed any warnings or possible financial difficulties. Publicly disclosed information was not relevant to predict forthcoming bank Snoras bankruptcy. Therefore it raises questions if accounting harmonisation as well as banking sector regulation and supervision efforts are sufficient under rapidly changing economic conditions.

DOI: http://dx.doi.org/10.5755/j01.em.17.3.2090