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Voluntary Disclosures and Accounting Theories
Finance & Accounting
Pages 5 (1255 words)
Finance and Accounting Contents Contents 2 Introduction 3 Voluntary disclosures and accounting theories 3 Conclusion 7 Reference 8 Bibliography 10 Introduction Every company periodically discloses the information about its transactions and other activities in form of the annual report.
Accounting principles are based upon some principles and one of the important principles of accounting is full disclosure principle. As per the full disclosure principles the companies must disclose all the relevant information about the company like the financial statements, accounting policies followed, additional information etc. Apart from the various mandatory disclosures many companies discloses many voluntary information like sustainability report, cost of training employees etc. All these activities add value to the organisation and thus are important for the stakeholders to take an informed investment decision. Voluntary disclosures and accounting theories The concept of voluntary disclosers originates from a variety of accounting theories. Therefore the relevant accounting theories have been studied in order to understand the need of voluntary disclosure of information. The need of voluntary disclosure originated from the two basic theories namely normative theory and positive theory. Normative theories: The basic premise behind the normative accounting theories is the subjective opinion which tells one what is good and what should be done. This is an opinion based theory which is based on the standards. ...
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