Acc 421

Full Disclosure

ACC 421

Your Name

March 1, 2012

Jay E. Wright, CPA

Full Disclosure

Full disclosure is very important in the financial statement world. A business needs to include the full disclosure. With businesses including this guarantees a fair presentation that will allow interested parties better to compare one business against the next. Financial statements do not always tell everything that businesses need to know. The full disclosure will be where the businesses information will be displayed.

“The full disclosure principle calls for financial reporting of any financial facts significant enough to influence the judgment of an informed reader (Kieso, Weygandt, Warfield, 2007).” The most important reason for the Financial Accounting Standards Board (FASB) is that it issued several provisions, standards, bulletins, and interpretations over the last 10 years. The reason for this increase in the provisions deals with the surge in just how complex businesses are. Some areas such as business combinations, revenue recognition, and taxes are very complex and companies use disclosure notes as an addendum to financial statements to explain their intricacy (Keiso, Weygandt, & Warfield, 2007).

The increase in the disclosure over the past 10 years is that the investors, stockholders, and other interested parties “are demanding information that is current and predictive (Keiso, Weygandt, & Warfield, 2007).” This is a part of the Necessity for Timely information. The Securities and Exchange Commission (SEC) are requiring to be published, which is something upper management has avoided (Keiso, Weygandt, & Warfield, 2007).

Full disclosure is very important in the financial reporting for several reasons. The financial statements and other accounting calculations do not show everything that could be behind the numbers on their own. A full disclosure includes the important details about different transactions, such as litigation, changes in...