• Internal Code :
  • Subject Code : HI6026
  • University : Holmes Institute
  • Subject Name : Auditing

Principle 5: Timely and balanced disclosure:

According to this principle the companies should disclose all concerning material matters to the relevant parties on time and in transparent manner. It has huge impact on companies from different perspectives. The article conducted by Safari, Mirshekary, Wise, (2015) revealed that the compliance with this principle can put the company in a position to win the trust and confidence of its investors as well as shareholders. With respect to developing the long term association with investors or other stakeholders, this principle should be followed in stringent manner. There should not be any hidden surprises to the parties that can hamper their confidence on the business entity as mentioned by Safari, Mirshekary, Wise, (2015). 

Other than this, the possible impact is that the company can found itself stumbled with the negative image if anything unconstructive comes out of the whole scenario. The share price, the value of company’s stocks and securities at international level and its brand value all depends upon the fact that how much reverence the company is showing with the principle of timely and balanced disclosure. Thus, the impacts of following this principle can be measured in terms of economy (where organization can lose its shareholders), investment (existing investors can withdraw their money), reputational aspects or goodwill aspects (loss or concreteness of trust, confidence and brand image) (Fung, 2014).

Further, in terms of ensuring the growth also the principle of timely and balanced disclosure is important. In building stakeholder relationships, the expediency of current principle is immense. If the severity of the issue is high then the long term impact can be realised and it can put company in the wrong position in entire financial market like the problems can occur in taking international bank loans, access to the capital financing, low government support and surprisingly the low investment in related mutual funds can also be witnessed. This principle bound companies to develop strong internal auditing process, so that the right information can be passed to the right people at the right time (Fung, 2014). T&D has impact on companies in the form of implementing strict financial review plans to avoid miscommunication. Its impact also revolve around the implementation of strong external communication strategies in order to inform about relevant internal affairs either through mail, direct meeting or website, it depends upon the interest and influence of stakeholder. 

Reference:

Safari, M., Mirshekary, S., Wise, V. 2015. Compliance with corporate governance principles: Australian evidence. Australian accounting, business and finance journal. 9(4). pp. 1-19. 

Fung, B. 2014. The demand and need for transparency and disclosure in corporate governance. Universal journal of management. 2(2). pp. 72-80. 

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