Accounting All-in-One For Dummies (+ Videos and Quizzes Online), 3rd Edition

Chapter 4

Explaining Disclosures

IN THIS CHAPTER

Touching on corporate governance

Studying the characteristics of a corporation

Reading company notes and disclosures

Figuring out who is responsible for full disclosure

Annual reports educate the shareholders about corporate operations for the past year. For all the information that's included in financial reports, sometimes the numbers just won't add-up unless you're aware that there was a change in policy or some adjustments that isn't normally included in the standard presentations.

In this chapter, we shed light on the explanatory notes and disclosures that commonly pop up in corporate annual reports, as well as other information found in most corporate annual reports. You’ll find out how a business becomes a corporation, and you review the four characteristics of a corporation: continuity, easy transferability of shares, centralized management, and (the biggie) limited liability. Annual reports educate the shareholders about corporate operations for the past year.

Questioning Self-Governance

Simply put, corporate governance ...