full disclosure principle

Examples of full disclosure principle in the following topics:

• Full-Disclosure Principle

  • The full disclosure principle states information important enough to influence decisions of an informed user should be disclosed.
  • The full disclosure principle states that information important enough to influence the decisions of an informed user of the financial statements should be disclosed.
  • Another aspect of completeness is fully disclosing all changes in accounting principles and their effects.
  • As an accountant, the full disclosure principle is important because the notes to the financial statements and other financial documents are subject to audit.
  • To obtain an unqualified (or clean) opinion, one must have an intrinsic understanding of the full disclosure principle to insure sufficient information for an unqualified opinion on the financial audit.

• Events Triggering Disclosure

  • Consistency generally requires that a company use the same accounting principles and reporting practices through time.
  • This concept prohibits indiscriminate switching of accounting principles or methods, such as changing inventory methods every year.
  • When a company makes a change in accounting principles, it must make the following disclosures in the financial statements (in the Notes to the Financial Statements):
  • Events that trigger disclosure should be based on an accountant's assessment of materiality, especially when facing decisions related to the full disclosure principle.
  • Events that trigger disclosure should be based on materiality and the full disclosure principle

• Effects of GAAP on the Income Statement

  • GAAP's assumptions, principles, and constraints can affect income statements through temporary (timing) and permanent differences.
  • To achieve basic objectives and implement fundamental qualities, GAAP has four basic principles:
  • The revenue recognition principle.
  • The matching principle.
  • The full disclosure principle.

• Introduction to GAAP

  • Monetary Unit Principle: assumes a stable currency is going to be the unit of record.
  • This is also know at the stable dollar principle.
  • Also, under this principle a company should establish an allowance for bad debt account.
  • Full Disclosure Principle: Amount and kinds of information disclosed should be decided based on trade-off analysis as a larger amount of information costs more to prepare and use.
  • Consistency principle: the company uses the same accounting principles and methods from year to year.

• Reporting of Financial Statement Analysis

  • In the US, companies must conform to GAAP, or generally accepted accounting principles.
  • These principles are set forward by the FASB, or the Financial Accounting Standards Board.
  • Monetary Unit principle: assumes a stable currency is going to be the unit of record.
  • Full Disclosure principle: implies that the amount and kinds of information disclosed should be decided based on trade-off analysis, as a larger amount of information costs more to prepare and use.
  • Consistency principle: the company uses the same accounting principles and methods from period to period.

• Mechanics of a Disclosure

  • That is where the disclosures on the financial statement come into play.
  • The disclosures can be required by generally accepted accounting principles or voluntary per management decisions.
  • This information must be noted in the disclosure.
  • Other items requiring disclosure are noteworthy events and transactions.
  • Voluntary disclosure in accounting is the provision of information by a company's management beyond requirements, such as generally accepted accounting principles and Securities and Exchange Commission rules, where the information is believed to be relevant to the decision making of users of the company's annual reports.

• Lobbying Scandals and the Reforms of 2007

  • The Honest Leadership and Open Government Act of 2007 sought to amend and strengthen parts of the Lobbying Disclosure Act of 1995.
  • It strengthens public disclosure requirements concerning lobbying activity and funding, places more restrictions on gifts for members of Congress and their staff, and provides for mandatory disclosure of earmarks in expenditure bills.
  • Requires lobbyist disclosure filings to be filed twice as often, by decreasing the time between filing from semi-annual to quarterly.
  • Requires the Government Accountability Office to audit annually lobbyist compliance with disclosure rules.
  • Requires that members' financial disclosure forms be posted on a searchable, sortable and downloadable website by August 1, 2008.

• Sunshine Laws

  • The Sunshine Laws enforce the principle of liberal democracy that governments are typically bound by a duty to publish and promote openness.
  • In essence, The Freedom of Information Act (FOIA) is a federal freedom of information law that allows for the full or partial disclosure of previously unreleased information and documents controlled by the United States government.
  • The Act defines agency records subject to disclosure, outlines mandatory disclosure procedures and grants nine exemptions to the statute.

• Journalistic Standards

  • Journalism ethics and standards describe the principles of ethics and good practice journalists adopt in response to specific challenges.
  • According to the Columbia Journalism Review, the German weekly Der Spiegel runs "most likely the world's largest fact checking operation," employing the equivalent of eighty full-time fact checkers as of 2010.
  • Journalism ethics and standards describe the principles of ethics and good practice journalists adopt in response to specific challenges.
  • According to the Columbia Journalism Review, the German weekly Der Spiegel runs "most likely the world's largest fact checking operation," employing the equivalent of eighty full-time fact checkers as of 2010.
  • This principle of limitation creates a practical and ethical dilemma by acknowledging that some attention must be given to the negative consequences of full disclosure.

• Regulating Congressional Lobbyists

  • Generally, the United States requires systematic disclosure of lobbying in all branches of government, including in Congress.
  • Disclosure in one sense allows lobbyists and public officials to justify their actions under the banner of openness and with full compliance of the law.
  • Many of the laws and guidelines are specified in the Lobbying Disclosure Act of 1995.
  • There are numerous regulations governing the practice of lobbying, often ones requiring transparency and disclosure.
  • Laws requiring disclosure have been more prevalent in the twentieth century.