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Describe mechanisms that discipline financial reporting reporting quality and the potential limitations of those mechanisms (15...

Describe mechanisms that discipline financial reporting reporting quality and the potential limitations of those mechanisms .

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Mechanisms that discpline financial reporting quality include the free market and incentives for companies to minimize cost of capital, auditors, contract provisions specially tailored to penalize misreporting, and enforcement by regulatory entities.

Ways to improve Financial reposrting Quality and processes are as follows:

  • Reduce your dependence on Excel. Excel will always be a valuable component of any accountant's toolbox.
  • Implement financial close management software to improve speed and accuracy
  • Improve interdepartmental communication.
  • Invest in lease accounting software.

Major Limitation of Financial Reorting are as follows:

  • No precision
  • Impact of non monetory factor ignored
  • Historical cost
  • Only interim reports provided.
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