Do accountants want full disclosures in corporate financial statements?
Liyanarachchi, Gregory A.
In August 2002, in the aftermath of the corporate failures in the US (e.g., Enron and WorldCom) the New Zealand Institute of Chartered Accountants (NZICA formerly ICANZ) released a discussion document on ‘corporate transparency’, thereby signaling the importance of full disclosure to the accounting community (ICANZ, 2002). Full disclosure means the disclosure of all potentially material information even when there are no legal or accounting requirements to do so. This is necessary to achieve greater transparency of corporate financial statements. Simply meeting the minimum disclosure requirements of standards may be legally sufficient but may not achieve NZICA’s preferred goal of greater corporate transparency. Though it is the corporate management that has control over the level of transparency in corporate financial statements, accounting practitioners are called to express their opinion on these statements, and hence, they too have a major influence on the matter. A move towards achieving greater corporate transparency therefore raises an important question. Do accountants want to see greater disclosures in corporate financial statements?
Publisher: University of Otago
Series: Accountancy Working Paper Series
Series number: 04_03/06
Research Type: Working Paper