COMM 104 Lecture Notes - Lecture 10: Ethical Movement, The Strongest, Financial Statement
Document Summary
People in companies often feel intense pressure to meet earnings targets whether they set those targets themselves or financial analysts set the targets. If they miss targets stock price may drop people might not receive their bonuses mgmt might be seen as incompetent etc etc. Financial statements should be true and fair representation of organization s financial performance rather than managed view of its performance. Organizations must account for their activities this is especially true when stakeholders are not nearby to validate information such as in publically held corporation. Financial statements are a key mechanism for meeting stakeholders need for info. All stakeholders including current investors and creditors as well as potential business partners employees or the government have a right to information about the organization s current financial status and how well it is performing. The organization wants these stakeholders to have the info without it they cannot gain access to financing.