Corporate reporting Essay Example | Topics and Well Written Essays - 750 words

Corporate reporting - Essay Example Accountants use corporate reports to check on the firm’s activities in line with the management’s transparency and accountability. On the other hand, other external users such as banks use corporate reports to establish the firm’s ability to repay loans. Corporate reports indicate the profitability of a firm on a periodic basis. Corporate reports are through three different sources such as the Securities and Exchange Commission, the respective company and other federal regulators (DiPiazzaJr and Eccles, 1997). Benefits of corporate reporting include provision of reliable information, flexibility and accountability. On the other hand, corporate reporting improves accuracy, diversity, corporate governance, ease of communication, transparency and attainment of company targets. Corporate reporting promotes flexibility through the directors’ ability to break down any key financial changes hence making it less complicated to achieve. The corporate report’s accuracy and validity are through an auditors’ letter. Since auditors also use corporate reporting, this improves transparency as well as attainment of a firm’s objectives. Diversity and ease of communication are through the use of IFRS and IABS requires a company to produce different types of reports including equity statement, cash flow and income statements respectively. Additionally, the ease of comparison and its usefulness to different users makes it an efficient tool for communicating Easy jet’s progr ess (Hooghiemstra, 2000). The primary disadvantages of corporate reporting include excessive information hence making it difficult to analyse the information since the information has not been two different users. On the other hand, there is over emphasis on the primary users (investors) instead of focusing on the real company events, as well as other users. In some instances, the information used may have been prepared using out-dated accounting methods hence useless for the business