Description
According to the textbook, the goal of financial reporting is to report financial information that is transparent and complete and truthfully report the financial performance of a company. Investors and other interested parties need to read and understand all aspects of financing reporting.
Use the Internet to research Verizon Communications’ financial statements, annual report, notes to the financial statements, president’s letter, and management discussion and analysis from the most recent year in order to complete this assignment.
Write a five to six (5-6) page paper in which you:
- Discuss the disclosure requirement on accounting policies, and identify at least two (2) examples of the most commonly required disclosure. Explain the key ways in which the examples you provided are useful to financial statement users. Analyze Verizon Communications’ disclosure on accounting policies, and give your opinion on whether or not the information is helpful for decision making. Provide a rationale for your response.
- Explain the importance of the management discussion and analysis section of an annual report. Select three (3) items from Verizon’s management and discussion analysis of the annual report that could be useful to potential investors. Provide three (3) specific examples of how the three (3) items you selected could influence a potential investor’s decision to invest in Verizon.
- Describe segmented information, and explain the way in which companies determine segments. Identify at least three (3) advantages and three (3) disadvantages of segmented financial data. Give your opinion on whether or not the advantages outweigh the disadvantages. Outline the manner in which Verizon segments its financial data. Suggest key actions that Verizon’s management can take in order to improve the company’s segmented financial data. Provide a rationale for your response.
- Analyze the various types of auditor’s reports, and determine the impact that the auditor’s report has on a company’s ability to obtain financing from a bank. Identify the type of auditor’s report issued on Verizon, and speculate the manner in which you believe banks will perceive Verizon’s auditor’s report.
- Use at least two (2) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.
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Running head: FULL DISCLOSURE IN FINANCIAL REPORTING
Full Disclosure in Financial Reporting
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FULL DISCLOSURE IN FINANCIAL REPORTING
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Introduction
The operations of all departments in an organization are linked together by the
Accounting and Finance department. Financial reporting is a very critical and a very important
task in any organization considering regulatory and statutory requirements, and the number of
stakeholders who are involved in an organization who include creditors, investors, debt
providers, public, government agencies, and governments. It plays a crucial role in corporate
governance. Financial reporting provides an organization’s management with crucial information
for analysis, planning, decision-making and benchmarking (Nobes, 2014). It gives the
stakeholders information which is important for making prudent and rational decisions about an
investment. A robust and sound financial reporting system facilitates inflows of capital and
promotes healthy competition. Generally, financial reporting is crucial to an organization and its
stakeholders for numerous reasons and therefore, financial reports should provide complete,
truthful and transparent financial information. This paper will analyze Verizon Communications’
financial reporting by analyzing its most recent annual report, financial statements notes to
financial statements, management analysis and discussion, and the president’s letter. Verizon
Communications is a telecommunications conglomerate based in the United States. It is an
American multinational conglomerate.
Disclosure Requirement on Accounting Policies
Accounting policies can be defined as a set of specific standards that govern an
organization’s preparation of its financial statements (Nobes, 2014). They are implemented by
the management team of an organization and are used when preparing financial statements. They
include procedures, methods and measurement systems for presenting disclosures. The
accounting policies that are used by a company vary from company to company and it is
FULL DISCLOSURE IN FINANCIAL REPORTING
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therefore important to disclose the primary accounting policies used by a company in preparation
and presentation of its financial statements. The disclosure should be a part of the statements.
Disclosing the accounting policies used ensures that the financial statements are well understood.
In certain cases, the disclosure is a requirement by the law. Examples of the commonly required
disclosures are significant accounting policies summary and investments (Leuz & Wysocki,
2016). The significant accounting policies summary disclosure contains the organization’s
description, sources, and purpose of revenue, and the main accounting policies that are in place.
The investments disclosure indicates the kind of investment in which the funds are held, ...