Corporate Reporting Essay Example | Topics and Well Written Essays - 1750 words

Corporate Reporting - Essay Example Rather, it is important that other key steps and approaches are taken towards the need to harness all the components of corporate reporting. In this respect, research has actually pointed to the fact that the regulation of corporate reporting is the key to achieving such benefits (Lang, Raedy and Wilson, 2006). Generally, a regulated corporate reporting is one that is taken from the institutional level to the political level in that it is given governmental backing in the regulation of basic rules governing finance and accounting principles (Coffee, 2007). This is normally done when the central government wants to have a better view and understanding of what the various institutions, mostly financial institutions and ministries, are doing in their own rights to contribute to gross domestic product growth. Though many have said that corporate reporting could exist and be of benefit without the need of any regulation of it, there are many more that have refused to reason like this, cit ing a number of reasons why a regulation of corporate reporting is necessary. Focus on people and not on data A major criticism that has gone against corporate reporting is the fact that individual institutions that have been left to manage and control corporate reporting only focus on people, the institutional structures and professions, instead of focusing on actual data collection (Kothari, Ramanna and Skinner, 2009). What this means is that control has often been over the people put in charge of corporate reporting and the mindsets, culture and agenda instead of on the actual evidence they gather in terms of data. For example, instead of ensuring that the financial data that a bank supervisory produces is authentic and empirical, focus has now shifted to whether or not the people involved in the reporting have the requisite qualifications, whether they operate according to organizational culture, and whether they have their methodologies matching with corporate practice. While a ll of these checks are done, the critical need of financial data is abandoned, thereby denying authorities of the privilege of getting the actual outcomes desired of corporate reporting. As an alternative to this crisis, development of regulation for corporate reporting is suggested so that the key role of supervision would not be in the hands of the institutions who undertake the corporate reporting. This is like saying that it is important to get a different outfit to police the policeman (Demsetz, 1969). When political regulations set in, focus is not lost as there are sufficient manpower and logistics to monitor both the institutions and the data produced by institutions. System within a system Another problem that makes the development of regulation for corporate reporting important is that the system has been criticized to be a system within a system and not an independent system on its own. What this means is that there are often parallel reporting systems that are run in add ition and at concurrent times with corporate reporting (Dye and Sunder, 2001). Once this happens, the attention needed to ensure strict monitoring, and evaluation is denied. Again, it makes institutions lose focus on which areas to exactly look out for in the analysis of the success of the financial environment. The Charted Institute of Management Accountants, CIMA (2010), laments on the situation, saying that there have been the inclusion of in-house systems to corporate reporting â€Å"such as those supporting internal management information, regulated financial reporting, investor relations or voluntary sustainability reports† (p. 6). Technically, it would realized the various financial regulations outlined by the institute are subsidiary aspects of corporate repo