Global Journal of Management and Business Research, A: Administration and Management, Volume 23 Issue 1

Therefore, the statutory income statement and balance sheet must show, either exclusively or depending on the various countries' regulations, amounts with accurate economic content. On the other hand, for tax or other reasons, items with no economic content and only a tax value are included in the financial reporting. This creates the conditions for a decision-making process that is misled by incorrect data. This decision-making process can affect both internal managers and external parties. If tax accounting entries without any economic content are present in financial reporting, three types of consequences occur, which can be summarised as follows: a) Consequences of an Informative Nature Towards the Outside World: Financial reporting prepared based on tax values do not reflect the economic-financial reality of the company. Communication to the outside world is therefore distorted with the consequence that users (e.g. company creditors, shareholders, workers, lenders, etc.), for whom financial reporting represents the only element of information about the company, have at their disposal data that fail to illustrate the reality of the economic entity to which they refer. Therefore, the ultimate consequence is that people outside the company are forced to make decisions based on values that do not reflect the reality of the business in which they are interested. b) Consequences of a Legal Nature: The inclusion, in financial reporting, of values without economic content entails the non-compliance with the truthfulness postulate imposed by Article 2423 of the Italian Civil Code. As we have pointed out in the previous pages, untruthful financial reporting is illegitimate financial reporting. Since the invalidity is related to content defects, the relevant approval resolution must be considered radically null and void. The recognition in the accounts (the results of which are reflected in the financial reporting for the financial year) of amounts with no economic content therefore undoubtedly creates the conditions for the financial reporting within which such accounts have been recognised to be considered untrue. This is the case both if the recognition of a tax value in financial reporting results in an overstatement of income and the opposite hypothesis. If an expense of 100 is recognised in financial reporting when there is a negative "real" income of 110, everyone would agree that the gain (or loss) has been overstated (or understated) because there is no negative value of 10 in the income statement (think, for example, of black purchases with no transit through the income statement). In stating this, implicitly, the untruthfulness of the profit and/or loss recorded in the accounts is highlighted and, it seems to us to be able to affirm that, to the ascertainment of overvaluation of income, must, necessarily, lead to a declaration of invalidity of the financial reporting. It is assumed that everyone would agree that financial reporting is unlawful to even in the opposite case. In the hypothesis, the "real" cost is lower than the cost recorded in the income statement. In such a case, the income reported would be underestimated because the costs recorded in financial reporting, at least partially, would not identify any input but would represent, exclusively, entries without economic content. Also, in this hypothesis, the writer assumes that everyone would agree in considering financial reporting null and void. The reason why the financial reporting preparer includes in the income statement a non-existent cost or does not record an economically correct cost does not affect the assessment of the illegality of financial reporting. It does not seem possible to "graduate" the reasons why an existing cost is not recognised or a non- existent value is recognised in the accounts. The "justifications" underlying the erroneous recognition can, at most, be taken into account when addressing the issue of the criminal relevance of the invalidity. In the context of criminal misrepresentation in financial reporting, the aspect of justification is, in fact, of legal importance. This is not the case concerning civil law illegality. Untrue financial reporting is unlawful financial reporting. More specifically, it is "null and void" financial reporting insofar as it infringes on the information rights of the community outside the company. If the reader agrees with the above statements, he must also accept the considerations that must develop regarding the consequences of such accounting behaviour. If, on the one hand, the recognition of a non-existent cost or the non-recognition of a "real" cost identify, without a shadow of a doubt, causes of invalidity of financial reporting, on the other hand, it is hard to see how a document could be considered valid and, therefore, truthful, in which exactly this occurs following the "import" of tax values that have nothing to do with "economically correct" costs and revenues. Regarding the repercussions on the management's decision-making process of the inclusion The Implementation of an Integrated Information System in the Company: From Option to Obligation for Efficient and Effective Management 7 Global Journal of Management and Business Research Volume XXIII Issue I Version I Year 2023 ( ) A © 2023 Global Journals Information Consequences within the Company: Considering the theme of this work, it is appropriate to focus on this issue, leaving readers interested in the other topics set out in points A and B, the burden of deepening, in specific texts, the legal and jurisprudential issues. c) should determine the income actually and economically produced by the company. Suppose this value is derived from the summation of data without economic content (such as tax values without income substance). In that case, the information deducible from financial reporting will be misleading as well as manifestly incorrect.