- difference between voluntary and mandatory disclosure?. ( only 2 to 3 sentence
ID: 2807523 • Letter: #
Question
- difference between voluntary and mandatory disclosure?. ( only 2 to 3 sentences)
-Distinguish voluntary and mandatory disclosure in emerging and developed markets?( difference in practice).. only 5 to 6 lines
- Why is it more in developing countries? the answer may include: developed countries have more disclosure -transparent- international investor - protection ( 3 sentences or 4 )
please write the answer in half page or more than half but not exceed 1 page, because I am going to memorize this and write it in my final......
Explanation / Answer
Mandatory disclosures are those which are mandated by the regulatory authorities or by the reporting standards. Where as voluntary disclosures are additional disclosures to give better, easy understanding for public and to maintain higher degree of transparency.
In developed markets accounting standards will be strong and are constantly updated in response to developments in economies. Generally most of the developed countries have various regulatory agencies monitoring the entities closely. So, the requirements for stringent disclosures is not required and. IFRS disclosures are framed for at most transparency. As mandatory disclosures in developed markets are very good which leaves very little to entities for voluntary disclosures just to aide in better understanding.
Whereas in emerging markets, they have their own accounting standards which can sometimes be sub-par when compared to IFRS or any equivalent set of standards and the reasons can vary from country to country. As mandatory disclosures are not so well equipped the relevance of voluntary disclosures is increased in emerging markets.
In emerging markets the disclosure requirements are more but they are generally deviated. This is due to legal structure of the country and to protect the interest of the investors
Many developed countries would like to operate or obtain resources from emerging markets due to low cost labour and low running costs. In the hurry to attract foreign investments entities in emerging markets can mismanage, which can put various stakeholders at risk.
Another reason can be absence of monitoring authorities or bodies, which puts governments in defence and their only option is to frame stringent disclosure requirements.
The legal framework of the country is also a factor in framing disclosure requirements.
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