The question is about financial reporting transparency:
What are the possible measures of financial reporting transparency? If one wants to compare two companies based on the transparency of their financial reports, what are the possible measures that can be used?
Transparency of Financial Statements as defined by Investopedia is as follows-
“Transparency is the extent to which investors have ready access to required financial information about a company, such as price levels, market depth, and audited financial reports. Investors also require transparency with investment firms and funds surrounding the various fees that'll be charged to them.”
Investopedia also rightly mentions that there is no metric or KPI associated with transparency. It isn’t a “normal” financial term, such as EBITDA or Current Ratio or Annual Recurring Revenue (ARR).
As for comparison between companies, unless they are public or you are involved in a private company as a [potential] investor, you may not be able to obtain complete transparency.
Lastly, comparing two companies is fraught with issues that could relate to sector, industry, geography, total revenue, etc. In other words while you might be able to compare Macy’s and Bloomingdales, but you can’t compare Macy’s and Home Depot.
