Full Disclosure Essay

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Full Disclosure Gabriella Goodfield ACC/421 December 12, 2011 Irina Petrova Full Disclosure What is the full disclosure principle in accounting? Why has disclosure increased substantially in the last 10 years? The full disclosure principle is a much needed principle in recent years. There were scandals where comes gave false information on the financial or excluded some important information. Not every company or public understands the full disclosure principle. The full disclosure is such an excellent principle. The reason why the principle has increase is to be explain in this essay. The full disclosure principle is extremely easy to understand. The full disclosure principle is “The full disclosure principle calls for financial reporting of any financial facts significant enough to influence the judgment of an informed reader” (Kieso, Weygandt, & Warfield, 2007). The full disclosure has increase in the last 10 years due several scandals such as the Enron. Why the Enron? Because the Enron did have a some disclosure but it did note the off balance of the balance sheet. To avoid such frauds the SEC decide that there was a need for a full disclosure. Companies to avoid any problems now use the full disclosure principle. Another reason is costs and benefits. “ In light of the off-balance sheet accounting frauds at companies like Enron, the benefits of these expanded disclosures seem fairly obvious to the investing public.” (Kieso, Weygandt, & Warfield, 2007). While in certain cases the disclosures of costs can great but in other cases the benefits can be extremely hard to see or assess. In either case the full disclosure did indeed help companies to avoid as much as possible fraud and other dishonest actions on the financial statements. Another reason that the full disclosure principle is due to the

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