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Financial Reporting and Analysis
Finance & Accounting
Pages 8 (2008 words)
Financial statements information helps the users such as investors, creditors, regulators, and government, to make business and economic decisions. These financial statements should thus report an economic activity without exaggerating it so that the behaviour towards one direction can be influenced towards one direction…
Favourism on one party over the other which is intentional should not exist concerning the information on financial reports. The financial statements will henceforth, provide a balanced scorecard to all the parties I relation to the effects of the transactions. b) The Board may be required to abandon neutrality and establish standards of reporting that conceals the particular transactions impact from the users of the financial reports. These costs will, however, exist regardless whether or not FASB authorizes their recognition in financial statements. It will not alter the economics of transaction and it will only withhold information from the users of the financial reports while making informed decisions and, eventually, the credibility of financial reports is impaired. c) The SEC relies on the Board and the private sector predecessors to establish and upgrade financial accounting and the reporting standards Accounting standards are therefore, established through a due process and open deliberations system to improve and certify the Board’s mission of improving financial reporting. By developing neutral accounting standards to the best interest of the public, similar transactions should be treated similarly and different transactions treated differently. ...
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