Question

Assignment Details

As we have discussed throughout the course, corporate scandals caused the public to lose confidence in corporate Americana and the accounting profession. Many users of financial information feel that transparency is lacking in financial reporting and more needs to be done in this area so that investors, creditors and other stakeholders feel comfortable in making decisions based on the information released by the organizations. Some organizations are very transparent where as others are not. How does your organization deal with transparency issues?

Answer 1

To increase the transperancy in the financial reporting an organization must do the following things:

1. Investors wants disclosure and simplicity. The more company say about where they are making money and how they are spending their resources, the more confident investors will be.

2. Financial reports should provide a a line-of-sight view into the company's growth drivers.

3. company should share the key metrics and performance indicators that investors consider important. these companies are more valuable than those companies that keep information to themselves.

4. Develop a strong cadre of directors, auditors, regulators and other professionals who understand their role and exercise their responsibilities within the system.

5. Use of internationally accepted accounting standards (IFRS) and methodologies tailored to the specific country’s specific infrastructure and regulatory environment, minimizing the alternative accounting practices and improved enforcement will go a long way in improving transparency in financial reporting.

6. Enforce good corporate governance.