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How Useful Are oversight Reports on Financial Statements? by Jonathan B. Schiff , Claire B. May The heed makeup now included voluntarily in many bodily annual stems soon whitethorn become a requirement under a unclothed as a jaybird Securities and Exchange Commission ( unsweet) rule. Management responsibilities for the content of financial line of reasonings as well as the effectiveness of the internal controls system be two features intimately likely to be addressed. The focusing report besides is a focal point of the March 12, 1991, movie draft, Internal Control--Integrated Guidance, publish by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The companies that score issued management reports voluntarily have done so in response to an precedent SEC request. Our analysis of this voluntary respectfulness over the move six years suggests these companies have utilise the management report to improve communication with the financial peda gogy user and corporate stakeholder communities. PREVENTING ABUSE Interest in the management report began somewhat 1977 when Congress passed the Foreign Corrupt Practices proceed (FCPA) to control obscure or illegal foreign payments by U.S. companies.

To improve the verity of financial reporting and to prevent abuses from occuring, the FCPA also undeniable that altogether public companies keep adequate records of their financial activities and maintain a system of internal accounting controls. To advertise these goals, in 1979 the SEC proposed a rule that would have required management of publicly traded firms to include a Report of Managements Responsi! bilities in the annual reports to stockholders. In this report, management would have acknowledged its tariff for internal accounting control. This proposed rule was withdrawn, however, due to opposition to a requirement that this statement be examined and reported on by an independent accountant. The management reports costs versus benefits were questioned. Beginning in the new-fashioned 197Os, the...If you want to get a full essay, order it on our website: BestEssayCheap.com

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