Full Discolusre Paper

Full Disclosure in Accounting

Debbie Griffis

ACC 421

October 3, 2011

Laurence C. Lander

Full Disclosure in Accounting

Sound decisions are based upon ones’ knowledge. Being informed is becoming focused in one area to make concrete decisions which can only be achieved with knowledge. A common business approach is to hire people with expertise in one area. People who are focused, for example, in marketing or sales make can make better decisions for the company because they are informed and knowledgeable about their area of expertise. The end result from this business philosophy is a product or a service that is profitable. Knowing delivers confident decision making.

When the product or service is either profitable or unprofitable, shareholders’ want to know why. When the financial reports of a company are deliverable, many times the numbers alone does not communicate all the transactions that happen within the business. Full disclosure principle in accounting requires financial facts to be communicated which are significant enough influence the judgment of the informed reader. GAAP implemented Full-disclose principle, which is one out of 10 principles to help financial reports be consistent and transparent. GAAPs’ role in accounting principles is to standardize and regulate accounting procedures for all businesses. Full disclosure principle offers readers of financial reports more defined terms of communication, allowing access to pertinent information which decisions are based from.

Readers of financial reports involve all shareholders of a company. In other words, readers of financial information is not limited to management, investor’s, and creditor’s, but all who are involved in the industry including employee’s, vendor’s, customer’s, and the general population. The relevance of information contained within financial reporting does not tell all the information the decision maker needs to know to make well informed decisions....