What does full disclosure mean? How does full disclosure affect financial reporting? Are there any ethical implications to what must be reported in order to comply with full disclosure? Explain. What recommendations would you make to management regarding what must be disclosed?
What does full disclosure mean? How does full disclosure affect financial reporting?
Generally accepted accounting principles (GAAP) include assumptions and principles designed to explain the basic tenets of accounting. They serve as a guide for how financial transactions should be recorded and reported. The FASB (Financial accounting standards board) together with oversight authority of the SEC are the two main sources of requirements for disclosure and reporting.
After the basic assumptions under GAAP, the principles include the full disclosure principle which requires:
1. Past performance as shown in comparative financial statements
2. Footnotes that supplement the financial statements to explain unique information about a company and the concepts used in the financial statements. Included in footnotes are company policies, accounting procedures and any other ...
The 509 word cited solution provides good discussions explaining full disclosure and it's relation to reporting.