Acc421.Fulldisclosurefinancialreporting

Full Disclosure Financial Reporting

Name

ACC 421

Professor

University of Phoenix

Date

Full Disclosure in Financial Reporting

Reviewing the details linked to full disclosure within financial reporting is critical to follow. According to Kieso, Weygandt and Warfield, (2007).,“The full disclosure principle calls for financial reporting of any financial facts significant enough to influence the judgment of an informed reader” (p. 1). When we review the details within the definition, we can see how the principle of full disclosure supports information that is found within financial statements. In addition, any organization that purposely withholds information and continues to keep the details out of the financials is misleading and unethical.

Reviewing over the last 10 years, we can see how an increase in disclosure can be linked to an increase in fraud. For example, if we look back just look at the huge fraud that was discovered within Enron. The details that arose discovered that Enron mislead many due to the lack of details within their financial statements. They withheld information that should have been disclosed and because of that choice, the Securities and Exchange Commission now implemented a requirement where organizations have to submit expanded disclosures. Unfortunately, there have been other companies who have also experienced issues relating to lack of disclosure. Because of this, the bar has been raised in an attempt to hold each and every company accountable for their actions. Accountabilities that are linked to lack of disclosure or even financials that have been altered. Because of these types of concerns, the Financial Accounting Standards Board (FASB) overseas generally accepted Accounting Principles (GAAP) and governs the requirements relating to the preparation of the financial statement requirement that corporations are required to submit. Because full disclosure is critical, these organization and principles help to support full...