Investors in the nation’s publicly traded companies will soon have access to an unprecedented level of corporate information when companies issue their annual reports, which, for the first time ever, will include details about their internal control over financial reporting and provide a greater degree of transparency.
To help investors understand the new reporting, Deloitte & Touche, Ernst & Young, KPMG and PricewaterhouseCoopers have developed two easy-to-use resource guides.
When a company measures its internal control over financial reporting, it monitors the vital processes involved in recording transactions and preparing financial reports. A company now must make public its assessment of the effectiveness of its internal control over financial reporting, including an explicit statement as to whether that control is effective and whether management has identified any “material weakness.”
The company’s independent auditor will evaluate management’s assessment and express an opinion on that assessment. This information is to appear in corporate annual reports starting in February 2005.
These new disclosures...
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