An explanation of the need for full disclosure in financial reporting, and identify possible consequences of failing to properly disclose certain items in financial statements© BrainMass Inc. brainmass.com March 4, 2021, 7:37 pm ad1c9bdddf
The primary need for full disclosure in financial reporting is to meet the legal and regulatory requirements of financial reporting, as per the guidelines formulated by the regulatory authority. It is essential for companies to provide full disclosures in order to make their financial reporting process fully transparent to the stakeholders as well as regulatory authorities. Such disclosures provides information to stakeholders about the key developments in the company.
Further, such reporting of disclosures is also essential from ethical perspective in the sense that stakeholders such as public shareholders, creditors,etc. should be made aware of all the key developments and news related to the company.
In today's post Enron and Sarbanes Oxley Act era, it is essential to fully disclose all the information in the financial reporting, otherwise, firms will be subject to strict regulatory action, fines and punishment. Further, ...
An explanation of the need for full disclosure in financial reporting, and identify possible consequences of failing to properly disclose certain items in financial statements