Digitisation of Financial Reporting as a Tool for Transparency and Sustainable Business Development in the European Union

Purpose: The study investigates the digitisation of financial reporting as a tool to increase transparency and promote sustainable business development in the context of regulatory transformation in the European Union. Design/Methodology/Approach: The methodological basis is an empirical-analytical design based on secondary data. Quantitative content analysis and technical validation covered 312 corporate financial reports for the 2022–2024 reporting years; tagging, validation errors, completeness, machine readability and logical consistency were assessed for the 243 Inline XBRL reports, and non-financial disclosures were compared across company groups by digitisation level. Research Limitation: The study is limited to EU corporate reports for 2022–2024. Findings: Of the 312 reports, 77.9% were submitted in Inline XBRL format. The average share of tagged items in the primary financial forms was 86.4%. At the same time, only 68.7% of Inline XBRL reports were fully machine-readable and 57.2% were fully logically consistent, indicating a gap between formal digitisation and functional transparency. Companies with a high level of financial reporting digitisation achieved a substantially higher share of fully structured non-financial disclosures than companies with a low level of digitisation. Practical Implication: The results can inform regulatory oversight, corporate digital reporting practices, and transparency standards in the EU. Social Implication: Improved digital reporting supports greater corporate transparency and sustainable business development. Originality/Value: The novelty lies in measuring the gap between formal digitisation and functional transparency in the same reports and in relating digitisation levels to the quality of non-financial disclosures.