This study investigated the principles and criteria for transparency and disclosure in financial reporting and the accountant’s contribution facilitating its implementation. Corporate governance stands upon several principles, raised from the Cadbury report, Principles of Corporate Governance, and Sarbanes-Oxley Act of 2002. It includes rights and equitable treatment of shareholders, interests of stakeholders, role and responsibilities of the board, integrity and ethical behavior, and disclosure and transparency.
Disclosure and transparency are one of the principles of corporate governance that aims to inform the public of the roles and responsibilities of the board and management in order to provide stakeholders with a level of accountability. It also includes the implementation of procedures to independently verify and safeguard the integrity of the company’s financial reporting..
Table of Contents
1. INTRODUCTION
1.1 RATIONALE OF THE STUDY
1.2 THE PROBLEM
1.3 SIGNIFICANCE OF THE STUDY
1.4 DEFINITION OF TERMS
2. THEORETICAL BACKGROUND
2.1 REVIEW OF RELATED LITERATURE
2.1.1 Transparency and Disclosure
2.1.2 Global, unified financial reporting disclosure
2.1.3 The evolution of the role of accountants
2.2 CONCEPTUAL FRAMEWORK
3. RESEARCH METHODOLOGY
3.1 RESEARCH ENVIRONMENT
3.2 RESEARCH RESPONDENTS
3.3 RESEARCH INSTRUMENT
3.4 RESEARCH PROCEDURES
4. CHAPTER 4
4.1 PRESENTATION, ANALYSIS, AND INTERPRETATION OF DATA
5. SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 FINDINGS OF THE STUDY
5.2 CONCLUSIONS
5.3 RECOMMENDATIONS
Research Objective and Focus
This study investigates the principles and criteria for transparency and disclosure in financial reporting and evaluates the accountant's role in facilitating its implementation within the Philippine context. It aims to determine how unified global standards influence organizational practices and contribute to effective corporate governance, especially in light of the upcoming ASEAN integration.
- Extent of practice in transparency and disclosure principles (accuracy, consistency, etc.)
- Application of financial disclosure criteria in Philippine business environments
- Impact of global unified reporting standards on ASEAN integration
- The role of accountants as moral guardians and promoters of corporate integrity
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The evolution of the role of accountants
The accounting industry began over 10,000 years ago with stone counters in Jericho. In ancient Sumerian cities, bookkeepers documented wealth by pressing the ends of sticks into damp clay tablets that hardened into permanent records. The double entry bookkeeping (for every credit in the ledger there must be a corresponding debit) originated in the fifteenth century (Atkinson, 2002).
During the Industrial Revolution in the eighteenth century, the innovation of cost accounting by calculating the costs of materials and labor for each step of the manufacturing process, then setting prices to ensure enough margin took place. In 1887, 31 accountants formed the predecessor of the American Institute of Certified Public Accountants (Atkinson, 2002).
In the early 1930s after the financial scandals of the 1920s and the corporate failures of the Great Depression, the industry sought to formalize consistency, transparency and trust in the profession. The profession got its own governing board and a manual called the Generally Accepted Accounting Principles. The profession was also entrusted with responsibility for auditing public companies. Accountants became moral guardians, an image reinforced in the public’s imagination in the 1930s when Price Waterhouse was enlisted by the Academy of Motion Picture Arts and Sciences to count ballots for the Academy Awards (Atkinson, 2002).
Summary of Chapters
INTRODUCTION: Discusses the necessity of transparency and disclosure in corporate governance and outlines the research problems and objectives.
THEORETICAL BACKGROUND: Reviews relevant literature on transparency, disclosure practices, and the historical evolution of the accounting profession's role in governance.
RESEARCH METHODOLOGY: Describes the descriptive research design, the survey instruments used, and the methodology applied to collect data from professional accountants.
CHAPTER 4: Presents the statistical analysis of the survey findings regarding various principles of transparency and disclosure.
SUMMARY, CONCLUSION AND RECOMMENDATION: Synthesizes the study's findings and offers recommendations for improving corporate governance standards and accountant participation.
Keywords
Corporate Governance, Financial Reporting, Transparency, Disclosure, Accounting Standards, ASEAN Integration, Auditor Independence, Audit Committee, Ethical Behavior, Fraud Prevention, Financial Disclosure, Corporate Accountability, Professional Ethics, Stakeholder Interests, Financial Transparency
Frequently Asked Questions
What is the fundamental purpose of this research?
The research examines the principles and criteria for transparency and disclosure in financial reporting and the specific role accountants play in implementing these standards to ensure effective corporate governance.
Which thematic areas does this study prioritize?
Key priorities include evaluating the accuracy, consistency, and timeliness of financial information, the role of auditors, the impact of international accounting standards (IFRS), and the preparation for ASEAN regional integration.
What is the primary research question?
The study seeks to identify the extent to which transparency and disclosure principles are practiced by accountants in the Philippines and how global, unified criteria influence corporate governance mechanisms.
Which methodology was employed for the study?
The study utilized a descriptive research method, employing survey questionnaires distributed to 20 certified public accountants across various sectors, supplemented by qualitative analysis for open-ended feedback.
What does the main body of the work cover?
The main sections cover the theoretical background of transparency and disclosure, the evolution of the accounting profession, and a detailed data presentation analyzing professional perceptions of transparency principles.
How are the key terms of this study defined?
The study defines core concepts such as 'accountant' as a practitioner of measurement and disclosure, 'corporate governance' as a structure for setting objectives, and 'transparency' as the responsible approach to disclosing information.
How does the study address the role of accountants in corruption?
It characterizes accountants as "moral guardians" and "whistle blowers" who, through adherence to professional ethics and skepticism, play a critical role in discouraging and controlling corruption and fraud.
What significance does the ASEAN integration have for this research?
The integration is highlighted as a driver for the adoption of unified global standards, necessitating more consistent and comparable financial information across ASEAN member countries.
What specific findings emerged regarding the practice of principles?
Accountants reported that principles of timeliness, consistency, and accuracy are practiced to a "very great extent," whereas the principle of convenience was found to be practiced only to a "moderate extent."
What is the key recommendation regarding auditor independence?
The study recommends enhancing independence by implementing systems where auditors are assigned from a neutral pool funded by collected fees, thereby reducing the influence of the companies they audit.
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- Michelle Simbulan (Autor:in), 2021, The Accountant's Role in Corporate Governance. Global, Unified. Transparency and Disclosure Criteria for Financial Reporting, München, GRIN Verlag, https://www.grin.com/document/1143192
