Full Disclosure in Financial Reporting

Full Disclosure in Financial Reporting - FULL DISCLOSURE IN...

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FULL DISCLOSURE IN FINANCIAL REPORTING 1 Full Disclosure in Financial Reporting ACC/421 Jamie Hall
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FULL DISCLOSURE IN FINANCIAL REPORTING 2 Full Disclosure in Financial Reporting In the current time it is more important than ever for a company to have high stock values, good standing with creditors and the ability to take out loans and invest when needed. Companies need to be able to show investors and creditors financial statements that represent a company’s good financial standing. Because of this many managers have had the tendency to smudge information on financial statements to represent their companies in a way that is false. In consequence the FASB has created many standards that companies must comply with when producing financial statements. Of this the full disclosure principle might be one of the hardest and most important for a company to comply with (Kieso, D.E. Weygandt, J. Warfield, T.D, 2007). The full disclosure principal states that a company must disclose any financial facts that might influence an informed reader. Because of past frauds such as Enron the FASB has increased standards in financial reporting significantly over the past ten years. Increased standards have forced companies to spend more money and time disclosing information in their financial statements. Some critics argue that this has caused an information overload. The size of financial statements for larger companies has
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Full Disclosure in Financial Reporting - FULL DISCLOSURE IN...

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