(i) Accounting: Disclose of such material facts that are not known in the Financial statements or notes of a company. (ii) Auditing: Reporting of positive and negative information of an audited firm in report. The main purpose fo this report to inform the creditors and investors of the company about the financial position of the company.
(iii) Banking: Complete information about the consumer of the loan provided by the bank. Information includes interest rate,fees,charges,and monthly payment etc.
(iv) Insurance: Disclose of information by applicant for insurance policy and information about risk related with insurance.
(v) Securities issue: Disclose of all information by issuer of securities and risk related with shares and bonds.
Financial Disclosure
The law require to disclose of financial information of an officer or employee personal financial information annually.
Financial Disclosure Statement
General Information
Disclose the financial information of firms official and emlpoyees in annual report of the company is called financial disclosure statement.This financial disclosure statement is also use for tax purpose as tax return with personal financial information of a calender year.
Accounting Disclosure Information
The main purpose of accounting is to collect, process, record and report information to all users.The information is presented in the form of financial statements. Financial statements include balance sheet ,income statement and cash flow statement. The user see these financial statment and determine the business and operation style of the company.The outside users review the financial statements of company and make invetment decisons.
Facts
Additional financial informaton is publish by the company to inform the user about the accoutning and policies use by the company in preparing the financial statements of the company.In some countries General Accepted Accounting Principles is use to prepating the financial statements.Disclosures provide information to external user about accounting principles.
Types
Disclosures provide information what accounting mehod and policies applied by the organiztion. Forexample information regarding collection of account receiveable,method for asset valuation. Some firms have more dislosures those who are listed on stock exchange.
Effects
Disclosure provide information regarding company financial position and processes use by the company. The information provided by the company helps the company in creating open environment. Disclosures help the investors to understand the financial position o the company.
Expert Insight
Accountants have a wide range of knowledge and experience relating to proper accounting policies that are needed for disclosures. Listed firms may depend on accountants in preparing the financial statements.
Financial Disclosure Fact Sheet
Financial disclosure statement is financial information about the officers and employees of the company filed with annual report of the company and information disclose in thief statement include investment, financial and income.
Financial disclosure statements filed
Purpose of financial disclosure statement
Information disclose on financial disclosure statement
Name of customer and individual as a sauce of income.
Any type of income of any amount.
Sources and amount of income receive or receivable any person.
Shareholding and leasehold interest.
Sources and amount of expenses paid in connection with the filer
No objection information received by filer from agent.
Accounting disclosure and Practices
Financial statements are important for completion of financial report. The financial reports are not complete if the financial disclosures are not complete if the financial disclosures are not provided. Disclosure means providing additional information in financial report. It is the responsibility of chief executive officer to check that financial statements are prepared according to accounting policies and disclosures are given properly. Cheif financial officer check that the financial report meet the standard of disclosures.
Methods of Disclosures
The basic information about figures and account balances in the financial statements is called footnotes.
Financial charts and tables that provide more information about the financial statements elements.
other information's is required if the firm is listed otherwise it is necessary legally.
Disclosures required by board and agencies
The Financial Accounting Standard board set out standards. Disclosure about the Depreciation method use.
The Securities and Exchange Commission of Pakistan. International Accounting Standards Board.
Financial disclosure statements needs and practices
The preparation of financial statements expanded and financial statements are prepared to view the financial result for the year. The financial statements play very important role in today world. The annual report filed by listed companies with Securities and Exchange Commission of Pakistan. It also become a repository of current information about the life insurance companies. The annual reports of the life insurance companies. The expansion in the size and scope of the financial statements also increase in the size of audience. In Pakistan SECP small universe of investors and shareholder of listed companies focus on statutory statements to assess the ability of the companies. Disclosures are need of today we can forecast that disclosures play very important role in increasing the size and scope of audience. And there is also increase in the scope and size of the statements. The investors see that financial statements are prepared according to accounting policies. The development of financial statements is necessary due increase in the size of audience and madmen in accounting policies. In life insurance business risk is very high and complex financial disclosures play very important role in understanding insurance business.
And there is a pressure on financial statements of life insurance business dueto industry crises in past years. The result is that financial statements disclose more information than past year. Due to increase in the size and demand of financial statements some doubts remain in the mind of reader. Today financial statement provide necessary information that need by reader and also provide information those statements are useful or not. This topic cover financial statements disclosure impact on life insurance firms and financial performance of life insurance firms. This topic addresses financial statements file under accounting policies. For reliability that financial statements disclosures provide useful information around risk and two methods. The first that information is provided in good manner. Information provided relating to financial performance of life insurance company.In this way quantitative measure better than qualitative. The second method is that information satisfy thru audience about the financial statements and investment made by investors and current investors in life insurance company.At the ended of this report conclusion is that reading and composing andanalyzed the 10 year financial statements of life insurance companies. Thisanalysis of financial statements is considered as subjective analysis. The financial statements disclosure practices are best or not. This will decide by the reader.
Observation and comment(change)
The value of financial statements disclosure with respect to life insurance
companies has increased in last few years. The improvement in life insurance
companies market equity and performance affect the balance sheet and
income statement. The practices of disclosure is differ from company to
company.
Room for improvement remains(change)
In life insurance companies disclosures about exposure of assets,liabilties
and equity. The life insurance companies include in the separate section of
the statement. It is clear that all affect of equity market reflection improve
the value of disclosures.
PROBLEM STATEMENT
Corporate governance performance affect the value of firms. It introduces
managers to make decisions and increase the value of firms to shareholders.
The purpose of corporate governance to reduce agency cost that may be
internal and external. For internal corporate governance deals with composition
of dirctors,chairperson and etc.The other important issue is ownership structure.
External system rely on takeover market good corporate governance play
very important role and incease in the value of the firm.It is discover that the
lagal system play very important role in good corporate governance.
The other issue is to investigate that the ownership structure affect the
performance of firms.The legal system of Pakistan is weak and not
sufficient protection for outsiders investors.The original owners of
the firms are maintaining high position in thier companies which is
due to concentrated ownership.
The third way of this report to assess firm raise finance from
external finance and result that the firms depend on external
finance performing better.
Aims and Objectives of Study
Financial accounting disclosure.
Financial accounting disclosures affect on corporate governance
in Pakistan
Corporate governance matters of equity market in Pakistan.
Research Question/Hypothesis
Financial accounting disclosures implications for corporate valuation.
Financial accounting disclosures implications for corporate ownership
and corporate financing.
Assumptions and Limitations
Corporate governance overview in Pakistan will be discuss in coming
chapters.For measuring the performance of corporate govenance in
Pakistan different factors use and divided into 3 indices.
Determine the corporate governance in Pakistan and ownership
structure affect the firm performance.Identify the owners and ownership with
firms and factors that influence the firm need of external finance.
Chapter 2
Literature Review
Disclosrures effects on the market reaction and loan loss provisions
Disclosures provide detail information about the firm performatnce and investors
make decisions on the basis of information provided by the corporation.Due to
enhancement in disclosures affect the investment decisions of managers and
external investors.Some banks regulators have increased the requirement to
disclose more information and still remain a problem in measuring the bank value.
Disccretionary accounting is an obstacle to understand the real value of bank.
In this report it is examine that discretionary accounting affect loan loss provisions.
If the investors have more information on corporation they can easily analyze
the managers ability from accounting reports.
The managers discretionary accounting affect the disclosure level. Bank with
high disclosures do less discretionary loan loss provisions than banks with
low disclosures. In examining this hypothesis the requirement and private monitoring
of the banks of Pakistan for disclosures.
In this hypothesis bank investors response positively to discretionary loan loss
provisions and negatively to nondiscretionary loan loss provisions. Some studies
identify that the disclosure affect the investors decisions to loan loss provisions.
In this report prices respinse to loan loss provisions due to disclosure are not
given properly. The affect of public disclosures on managers is important issue due
to discretionary accounting and value and quality of disclose information in
financial disclosure statement.Better corporate disclose quality information
which is help for investors to make investment decisions?
We consider samples that consist 109 commercial banks and 57 holding
companies from 32 countries over the period from 1992 to 2000.We obtained
disclosure from the annual reports the bank. At the end we measure disclosure
level of every country and discretionary loan loss provisions.
This report find that bank with higher disclosures towards less discretionary loan loss
provisions and affect at country level private monitoring and disclosure requirements.
This report also find those market prices of firms and better disclosures response less
positively and negatively to nondiscretionary loan loss provisions than do with
with lower disclosures.
Bank disclosure and loan loss provisions
In this report a bank disclose its risk profile in the market and investors choose for
high risk. The quality of disclosures improve the confidence of information available
to public and management investment and operating decisions. Higher disclosure or more
information available related to firms make the investors sophisticated. Discretionary accounting
affect the managers accounting and reporting.
