Transparency in Reporting
Owners can be proprietors, partners, or shareholders, depending on the type of business. As the need for more capital grows, it becomes easier to use a corporate structure. Owners don't have to stay with the same company—they can sell their shares to someone else. The new buyer can also sell whenever they want. The main shareholder can even sell the whole company to another company or a bigger investor. This corporate structure makes it easier for owners in transferring ownership.
When an individual buys an asset from another person, they might not know about any hidden debts especially contingent liabilities which are expected to impact in the near/far future. This lack of transparency is a problem. But if companies handle these transactions, they must disclose any hidden debts because of reporting rules. If they don't, the auditor (an independent checker) is held accountable.
So, always aim high, work hard, report clearly, and promote transparency and bring glory to financial reporting.
By CA L.Muralidharan and CPA L.Mukundan
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