Reporting in Agriculture , Forestry , and Fishery . The Case of Romania

The fields “agriculture”, “forestry” and “fishery” are sensitive to ecological issues. Due to their importance in a country’s economy, the present research investigates the financial and non-financial reporting of companies from these operational areas. The research design is empirical. The sample consists in companies listed at the Bucharest Stock Exchange in Romania, which operate in the business of fields “agriculture”, “forestry” or “fishery”. These companies are analyzed in order to identify the elements of sustainability reporting made public to the shareholders. The author tests whether there is a correlation between their financial performance and their extent of disclosure in the sustainability domain.


Introduction
The fields "agriculture", "forestry" and "fishery" are sensitive to ecological issues.Due to their importance in a country's economy, this area has caught the researcher's attention over time.There are several studies that deal with financial and non-financial reporting in these fields.For instance, Jack (2007) intends to elucidate the difficulties which farmers face when using accounting and to explore the current agricultural environment which means that more than ever farmers are being obliged to engage with accounting.The evidence collected for this paper suggests that in the face of corporate power or 'post productivist' activities, farmers are forced to become engaged with accounting to greater extent than they had in the past.Bosch et al. (2012) presents an empirical research comparing the accounting difficulties that arise from the use of two valuation methods for biological assets, fair value and historical cost accounting, in the agricultural sector.Whittaker et al. (2013) performs a comparison of 11 existing greenhouse gas (GHG) accounting tools produced in order to calculate emissions from arable crops, either for food or bioenergy production in the UK, whereas a multi-criteria-analysis is performed to test their relative strengths and weaknesses.Of all economic sectors in the UK, agriculture contributes around 9% of GHG emissions annually, and is a significant component of the lifecycle emissions of many everyday food and other products.Similarly, O'Brien et al. (2014) compare the effect of using two different methodologies when completing a MACC (Marginal abatement cost curve) analysis of national agricultural GHG emissions.The study shows that the agricultural sector emitted 10% of EU GHG emissions in 2011, but on a national basis this varied from 2% in Malta to over 30% in Ireland.
Besides reducing GHG emissions, agriculture is also faced with the challenge of increasing production to feed a growing world population, and providing feedstock for expanding biofuel production.Without any doubt, the agri-food industry is crucial.However, there is little accounting academic research on agri-food industry, and little consideration of accounting issues in the agricultural literature (Argiles and Slof, 2001;Juchau and Hill, 2000).The present research tries to fill in this gap by investigating the financial and nonfinancial reporting of companies from agriculture, forestry and fishery.First, the research design is described in short.The following section presents the results of the research.Last but not least, the final section includes the conclusions.
1st International Conference on Business Management

Research design
The research approach is empirical in nature.The sample consists of all companies which operate in the areas "agriculture", "forestry" and "fishery" and are listed at the Bucharest Stock Exchange in Romania.Consequently, the sample includes 23 companies which have the following NACE codes: 111 "Growing of cereals (except rice), leguminous crops and oil seeds" (5 companies, 22% of the sample), 161 "Support activities for crop production" (6 companies, 26%), 147 "Raising of poultry" (companies, 22%), and others, namely 7 companies representing 30% (146 "Raising of swine/pigs", 130 "Plant propagation", 220 "Logging", 210 "Silviculture and other forestry activities", 164 "Seed processing for propagation", and 322 "Freshwater aquaculture").
For each, the author analyzed the most recent annual financial report published on the official website of the Bucharest Stock Exchange (www.bvb.ro),respectively the package prepared for the year ended 31th of December 2013.Generally, according to the Romanian regulations, the financial report published by listed companies consists in: the financial statements, the administrator's report, the report of the censor, the external auditor's report, the decisions of the general assembly of shareholders, and the report prepared in accordance with the Regulation of the Romanian National Securities Commission no.1/2006.

Results
First of all, the study analyzes the audit opinion issued upon the most recent financial statements of the selected companies.Regarding the companies in the sample, the five different situations have been identified, as presented in Table 1.1.

Case Number
Unmodified opinion (ISA) 7 Modified opinion (ISA) 7 Limited review (ISRS 4400) 1 Annual reporting not submitted 2 Audit report not available 6

TOTAL 23
Source: Own projection Moreover, Table 1.2 presents the types of auditors that performed the audit of listed companies operating in the field "agriculture", "forestry" and "fishery".Interesting was also the analysis of the areas that triggered a modified opinion.Few such triggers are general, e.g. the lack of operations in the reporting year or going concern issues.The majority of them are related to assets (mostly fixed and financial assets).Another area that was considered to be misstated by the financial auditor was that of receivables and liabilities.The position "Inventory" from the balance sheet was also subject of the qualification of the audit opinion in several companies.Just in two cases, the problems in cash and cash equivalents triggered a modified opinion.Second of all, the author analyzed the financial performance and stability of the companies in the sample.The information source is the most recent financial data posted on the Bucharest Stock Exchange site.

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The key figures of the financial statements of 2013 (for 17 companies) and 2012 (in case of 3 companies) have been included in the analysis, as no other more recent information was available.For 3 out of 23 companies no data was available, therefore this part of the study was performed upon 20 companies only.
Four key indicators have been computed for each of the 20 companies, as presented in Table 1.3.Each of these indicators has been interpreted according to the following assessment scale (as presented in table 1.4).

Conclusions
The agri-food industry nowadays faces numerous challenges, among which reducing greenhouse gas emissions; the increasing production to feed a growing world population, and providing feedstock for expanding biofuel production.On this background, the research focused on companies listed at the Bucharest Stock Exchange wichi operate in the fields agriculture, forestry and fishery.The analysis revealed that in terms of financial stability, the situation can be assessed as being "middle", whereas in terms of earning, the status of such companies tends to be bad.Some are also exposed to bankruptcy.
Regarding the auditors' opinion the financial statements of the selected companies, the situation is split in half: some received a modified opinion, while others benefit fom an unmodified opinion.With reference to the reporting of sustainability issues in the the report prepared in accordance with the Regulation of the Romanian National Securities Commission no.1/2006, such reporting is scarce and not at all detailed.Most companies simply state that they panies have the operating, sanitary, veterinary and environmental authorizations which are stipulated by law for the activities they carry out; that related to the legal provisions, their operations do not have a significant environmental impact; that no litigations regarding the violation of environmental regulations exist or are foreseen.Future research shall expand upon other reporting environment such as the websites of the selected companies or other reports issued for the shareholders.

Table 1 .
5 depicts the results of the performed analysis on the financial performance of the companies in the sample.