Financial reporting is used to disclose additional financial information, – as the president’s letter or supplementary schedules in the corporate annual report, prospectuses, reports filed with government agencies, news releases, management’s forecasts, and social or environmental impact statements -, other than formal financial statements when Companies need it because of authoritative pronouncement, regulatory rule, or custom, or wish it voluntarily.
Some argue that having various organizations establish accounting principles is wasteful and inefficient. Rather than mandating accounting rules, each company could voluntarily disclose the type of information it considered important. In addition, if an investor wants additional information, the investor could contact the company and pay to receive the additional information desired. Comment on the appropriateness of this viewpoint.
I think that the need to learn what standards are using each company in order to evaluate its financial statements, and the conversion to another standards in order to be able to compare with other companies will be a mess and that will discourage investors and creditors to provide capital. People need understandable, reliable, useful, and easily comparable information in order to make the most appropriate decisions. And charging interested parties for the information would lead to great inequities!!