Meaning of Full Disclosure
This is a concept in financial accounting which requires release of all the facts that are material to financial statements. This is because failure to avail them may lead to misleading information in the financial statements: statement of financial position and statement of financial performance.
The material facts include all the receipts and other assisting evidence related materials. It is important especially when auditors come to vet the authenticity of the information. In fact, it makes it easy for auditors and government tax officers to trace the originality of the records in an organization.
Inability to Predict End User Information
End-users refers to the all the stakeholders that might be interested in the financial statements of a company. This includes shareholders, the government, private sector and the public. End-user information that touches on these groups is hard to predict. Although disclosure requires that accountants reveal all the material facts that allude to a financial statement, it is rather challenging to input all these people.
This is because of company policies, governments and legal requirements, standards of accounting requirements and specific organizational needs. For example, it is rather embarrassing to reveal all the debtors of a company (Drever, Santon and McGoan, 2007). This makes it vulnerable to competitor sabotage.
It is also imprudent to reveal financial institutions that partner with a company for the same reasons. Ethical directors and managers will run the company in the best manner possible. They will also reveal relevant information to shareholders during AGMs and through Financial Statements. This reduces the information gap between shareholders and management (Liyanarachchi, 2008).
Application of Conventional Accounting to Environment
Conventional accounting refers to the disclosure requirements as set out by the accounting standards. This includes IAS and IFRS. It also incorporates the need to have an all-inclusive disclosure. In the environment, it is important in many ways. This includes the fact that it has measurements and efficiency is the same factors that have a bearing to environment (Hooper, Davey and Presscot, 2009).
In the social set up, issues such as unemployment can easily be dealt with using these accounting methods. It is rather important to have a clear understanding of the problem in this case. Conventional accounting may not necessarily apply here directly, but it has an indirect effect on the employment. The hiring and subsequent need for the employees to have certain features is crucial in any organization (Hooper et al. 2008).
Although conventional accounting is critical in the business world since it keeps in check the manner in which organizations disclose figures, it rather hard to have direct implications in both the social and environmental set ups (Deegan and Samkin, 2009).
References
Deegan, C. & Samkin, C. (2009). New Zealand Financial Accounting. Auckland: McGraw Hill.
Drever, M. Santon, P. & McGoan, S. (2007). Contemporary Issues In Accounting. Australia: John Wiley.
Hooper, et al. (2008). Conceptual Issues in Accounting: A New Zealand Perspective. Melbourne: Cengage Learning.
Hooper, K. Davey, H. & Presscot, S. (2009). Conceptual Issues In Accounting:A New Zealand Perspective. Melbourne: Cengage Learning.
Liyanarachchi, G. (2008). Creative Accounting and Professional Development. Melbourne: Cengage Learning.