1. How effective are accounting standards (e.g. US GAAP, IFRS (or IAS)) in facilitating credible
communication between corporate managers and outside investors? What factors determine their effectiveness?
2. In what way is the globalization of capital markets affecting the globalization of financial
reporting?
3. To what extent, in your opinion, do the current format and content of audit reports respond to the needs and expectations of investors and lenders in capital markets?
4. Comment on and discuss the following statement and the related questions. ‘Notwithstanding the efforts made by regulatory bodies and accounting policymakers in disclosure and corporate reporting, there is still some ambiguity surrounding several important topics in this area.’ Consider the following questions regarding the informational role of mandatory financial reporting:
(a) What information about a company’s financial conditions should be released to investors
and other stakeholders in a financial report?
(b) Where should the information be released? Should it be recognized explicitly in the body
of the financial statements, disclosed in notes, or revealed in some other fashion?
(c) When should the information be disclosed?