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Does the reporting duty of companies extend to more than just the legal financial reporting responsibility? In your opinion, is there also a responsibility for ethical, social and environmental reporting? Critically discuss the issues involved. Incorporate in your discussion reference to recent corporate events that have received wide media coverage. Introduction In view of recent corporate collapses, one would wonder if listed companies were still safe to invest in. High profile corporate failures have brought a stark reality to how poor transparency, inadequate management oversight, misguided managers, misaligned compensation programs and inadequate risk management can lead to the downfall of many a great organization. Is legal financial reporting sufficient for a company? The legal financial reporting responsibility of companies would be derived from AASB. A reporting entity would just be required to prepare General Purpose Financial Reports (GPFRs) in order to meet the minimum disclosure requirements. GPFRs would include Statement of Cash Flows, Statement of Financial Position, Statement of Financial Performance, as well as directors’ declaration, report and auditors’ report. For most annual reports of companies, it can be seen that just the legal financial requirements are being complied with. Analysis Worldcom, the number 2 long- distance telephone provider, based in the United States was faced with bankruptcy and fraud charges from American federal authorities, Securities and Exchange Commission (SEC) and the Justice Department. Charges on Worldcom was filed as it restated its expenses to cut reported cash flow, with the effect of making Worldcom’s financial performance being more attractive to would be investors.
Approximate Word count = 940
Approximate Pages = 3.8
(250 words per page double spaced)
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