Sample Thesis Paper
The other measures brought about by new legislation such as that for SPEs allowed the users to get better image of the company’s performance, for the shareholders to evaluate the benefit of their investments and for creditors to judge the liquidity of the company (Hartgraves 2002). The other steps relating to auditor independence cannot be rules out either as with less of a related party relationship with the client, the auditors could now more accurately report incidents of misrepresentation in the statements.
Not all of the measures taken can be said to have taken care of the problems however. There is still the problem of quantifying the value of stock options to expense them out and report accurately on the financial statements. Furthermore, auditor fees is still a problem which if persists, may lead to them cutting corners again in new cases. The current financial crisis has revealed that the fair value method which allowed companies to value some assets based on complicated models which could be manipulated to drive up value still present an ever present threat. Thus we can see that some problems are still abounding in the business world today with regards to financial reporting.