Significance of Financial Reporting

¡¥Significance of Financial Reporting¡¦ -An Essay schoolchild No.:S00042472 Student Name:Janak Patel The Collapse of the Corporate Giants like Enron and WorldCom view as raise the imminent question, which always remains in the back of an investor¡¦s mind, ¡§Can I effrontery my hard earned chief city in somebody else¡¦s hand ?¡¨ This is not the offset printing time that investors set nigh lost their trust in companies so far the point does not change that the cost of capital from the merchandise has increased significantly for the companies. Investors have started to invest their capital in risk free securities rather than in company shops. Investors have also started to look with contempt and doubt at a company¡¦s pecuniary reports because some of these collapses were preceded by financial frauds cleverly covered by the management of such companies. Investors have arrived to a stage where they no more trust the financial reports provided by the company. However some of the intellectuals believe that financial account is of no significance for investment decisions.

The reason being the fact that most of the financial reports atomic number 18 historical and they have already been taken into consideration while deciding the price of the stock of the company and it also does not give an idea about the future position of the company. On the other hand thither are also some intellectuals who argue that there are still a lot of investors who still takes their investment decisions on the basis of a company¡¦s financial reports. fill investors what kind of financial information they sine qua non companies to publish and youll plausibly hear two words: more and better. But lets face it, the financial statements of some firms are designed to bedim rather than reveal information. So what would ensure investor¡¦s trust in companies and its governance? The answer is a good, future oriented and more transparent financial reporting system. One cannot abjure the importance of a good financial reporting system... If you want to get a full essay, order it on our website: Ordercustompaper.com

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