ACC. Full Disclosure
The full disclosure principle is something that requires financial facts that could influence the judgment of a financial reported. The full disclosure principle requires release of companies’ financial information to users of these financial documents. This information assists users in making financial decisions. These decisions include investing, lending, and selling or buying stocks.
Companies’ requirements mandate that the information disclosed makes a difference. This means worthwhile information processed to the user in assisting in decision making. The full disclosure principle is a required process mandated by the Financial Accounting Standards Board and the Securities and Exchange Commission. These organizations require businesses to make financial information understandable, so users make the proper decisions. The full disclosure principle expanded over time because of Financial Accounting Standards Board and the Securities and Exchange Commission requirements. These requirements mandate businesses or companies to increase the amount of financial information, which they provide to users. In the possibility a business or company does not disclose enough or attempts to hide important information and consequences follow. In the event of unethical practices the governing organization imposes fines on businesses or companies among other consequences. Closure is another possible consequence of unethical practices. Loss of customers is also a damaging consequence of poor ethics. No one get in business to lose money.
The Full Disclosure Principal states that, “some useful information is best provided in the financial statements, and some is best provided by means other than in financial statements” (Weygandt, Kinnel, & Kieso, 2010. p. 1514). Full disclosure in financial reporting is important because information about the company and its finances, from basic financial statements to information are…