英语论文网

This puts forward the theory that minimum revelation levels and particular measurement tools, such as U.S. GAAP and SEC requirements will still be required to decrease the information imbalance existing between a firm's accountants and shareholders. Another standpoint states that there are motives for the filing of financial reports by public corporation. In contrast, if corporations want to acquire finance through the sale of shares, they will encourage the development of trust that shareholders put in the company's present and upcoming financial performance by filing complete financial reports. In contrast, if control (management) and ownership (shareholders) are two different things then present shareholders will need information about the financial credibility and working results of the firm if they are expected to go contributing their funds. If a corporation does not file well-timed and credible information, stakeholders will lose faith and stop giving funds to that firm. In this respect, Warren Buffett talks about the significance of informing stockholders (1996): “We will be candid in our reporting to you, emphasizing the pluses and minuses important in appraising business value. Our guideline is to tell you the business facts that we would want to know if our positions were reversed. We owe you no less. Moreover, as a company with a major communications business, it would be inexcusable for us to apply lesser standards of accuracy, balance and incisiveness when reporting on ourselves than we would expect our news people to apply when reporting on others. We also believe candor benefits us as managers: The CEO who misleads others in public may eventually mislead himself in private”.

If firm executives wish to create faith and long-term value, they will not attempt to over state the share price by incorrectly reporting accounting figures. Buffett clarifies the share price approach of his company Berkshire Hathaway in the below manner (1996): “To the extent possible, we would like each Berkshire shareholder to record a gain or loss in market value during his period of ownership that is proportional to the gain or loss in per-share intrinsic value recorded by the company during that holding period. For this to come about, the relationship between the intrinsic value and the market price of a Berkshire share would need to remain constant, and by our preferences at 1-to-1. As that implies, we would rather see Berkshire?′s stock price at a fair level than a high level”.

Corporate managers who possess long-term vision and value-based compensation packages will offer pertinent financial statements to stakeholders in order to acquire finance for the growth of their firms. The reason behind an independent audit is to obtain estimation on a firm's financial statements. Financial statements, in combination with an independent auditor's report, are submitted to clients, creditors, current and prospective investors, and other involved parties. The external auditor's report offers endorsement to the firm's financial figures. Independent audits are required because of the innate clash between a firm's management and the individuals who make use of financial reports. An external audit may create trust in a company's financial statements, making it feasible to e本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。