Phenomenon of the low level of transparency that is often related to state owned companies, especially for companies fully owned by state is often correlated with possibilities and risks of unethical business practices and frauds resulting with diminished efficiency and integrity of these companies on the market. In the case of this type of companies, since markets does not function as the mechanism of valorisation of their economic choices, any increase of their unchecked expenditures does act as the permanent source of the raising uncontrolled costs for both business and societies at large. This Phd dissertation was aimed at elaborating the relationships between the application of the international standards of financial transparency and improvement in the governance related practise of the companies fully owned by state in the case of Croatia. Based on application of the series of correlation and multiple regression analyses a positive significant relationship between application of the international standards of financial transparency and quality of governance of the fully state owned companies is determined. The higher financial transparency standards applied the more checked and balanced expenditures happened to be. Keeping expenditures under control is the source of increasing the efficacy of these companies. In the sphere of qualitative analysis it has been established that cumulatively around 60 % of the international standards of financial transparency have been implemented in the national institutional arrangements, including policies and practices in Croatia with distinction of the fact that some of the most pronounced of the related standards at this point are not implemented at all. Resultantly, the highest value added in terms of positive influence over the quality of governance processes in the companies fully owned by state in Croatia would be if accounting systems based on the full adequate implementation of the international standards of financial transparency are developed or upgraded particularly on these segments.