Transparent Reporting?
Document Type
Article
Publication Date
3-2003
Abstract
The article focuses on transparency reporting in accounting and financial reporting. It states that there is a fallacy in assuming that compliance with generally accepted accounting principles (GAAP) can be considered the equivalent of transparency reporting. It suggests that highly detailed standards may be at odds with transparency and utilizes the example of Enron's accounting of special-purpose entities as being GAAP-compliant but not being transparent. It states that chief financial officers and audit partners need to accept that GAAP compliance is not equivalent to transparency. It suggests that improvements in transparency can allow markets to assess company value with greater fairness and reduce the amount of shareholder litigations as a result.