WIIL YOU ADOPT QFR

Financial professional, it’s time to give the public as much accurate financial information as you can

THE TRADITIONAL REPORTING MODEL
“Have been conceived and implemented in concert with the naïve assumption that capital market depend on totally on managers to provide public information”
»Traditional model: generally accepted accounting principle (GAAP) emerges from a political process that’s too contentious and compromised to deliver to useful information that the market need.
» QFR: likewise try to build better relationship with the capital markets by providing tha best financial statements you can
SOLVING THE PROBLEM
“Capital markets have needs and desires for financial information that aren’t addressed by traditional public report”
» lack of information à make 3 outcomes possible
lack of useful information in a company’s financial statements may cause the markets to pursue other investment opportunities
the markets may decide that the company’s investment potential is great, even though the reported information inadequate
sophisticated investors and credit will turn elsewhere for private information that’s more useful than GAAP financial statement
» more complete information à higher security prices
Incomplete information à lower security prices
QUALITY FINANCIAL REPORTING – A SUPERIOR STRATEGY
“Adopting QFR has positive effect for essentially everyone directly or indirectly involved in the market “
» Have benefits for: managers, stockholder, all investors and creditors, the economy operates, and society as a whole
» Two groups will lose:
Those who have somehow fooled in the markets.
those who successfully cheat the markets with illegal insider information
THE HIGH ROAD
There are three “high road”
doing what the FASB has recommended instead pf merely doing what it has permitted (the save one)
to engage tough auditors and do what they say instead of picking cheap and easy auditors who do what to you say
To branch out into new areas based on your own market research and common sense as to what helps statement readers make better decisions.
AN OBJECTION
“Honestly when we applied QFR you might allocate more cost because higher preparation cost created by additional reporting and auditing effort, but when we see this from “cost and benefit” poin of view, we still can get more benefit from applied QFR”
ARE YOU READY
“Permanent improvement in accounting practices and in methods of corporate reporting cannot be brought about by legislation or by government regulation.”
The big question is “are you ready to improve the quality of your financial reporting policies has come.