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Intermediate Accounting, 15th Edition by Terry D. Warfield, Donald E. Kieso, Jerry J. Weygandt

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CHAPTER 24 Full Disclosure in Financial Reporting

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

  1. Review the full disclosure principle and describe implementation problems.
  2. Explain the use of notes in financial statement preparation.
  3. Discuss the disclosure requirements for related-party transactions, post-balance-sheet events, and major business segments.
  4. Describe the accounting problems associated with interim reporting.
  5. Identify the major disclosures in the auditor's report.
  6. Understand management's responsibilities for financials.
  7. Identify issues related to financial forecasts and projections.
  8. Describe the profession's response to fraudulent financial reporting.

High-Quality Financial Reporting—Always in Fashion

Here are excerpts from leading experts regarding the importance of high-quality financial reporting:

Warren E. Buffett, Chairman and Chief Executive Officer, Berkshire Hathaway Inc.:

Financial reporting for Berkshire Hathaway, and for me personally, is the beginning of every decision that we make around here in terms of capital. I'm punching out 10-Ks and 10-Qs every single day. We look at the numbers and try to evaluate the quality of the financial reporting, and then we try to figure out what that means for the bonds and stocks that we're looking at, and thinking of either buying or selling.

Judy Lewent, Executive Vice President and Chief Financial Officer, Merck & Co., Inc.:

Higher standards, when properly implemented, drive excellence. ...

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