Question

Read the discussion brief entitled Financial and Business Reporting on the Internet. These materials are produced by permission of The Institute of Chartered Accountants of Ontario, and may not be further reproduced without prior written permission of The Institute of Chartered Accountants of Ontario. Comment on both one positive aspect and one negative aspect of using the Internet to communicate financial information. Your post should be two brief paragraphs.

Answer 1

Development in Information Technology and widespread use of Internet has made a way of producing and assessing information very easier for both individuals and institutions.Hence,nowadays internet is used as mode to communicate financial information. This has both positive and negative effect.

In today's economy, it is the basic requirement of every nation to raise capital , attract foreign investment and enhance confidence to attain high growth rate and stakeholders understanding. Corporate reporting i.e communicating financial information through internet helps to attain the objective by ensuring transparency and defining the amount of information and characteristics of financial information.

As per rules, the firm in an industry is obligatory of disclosing same level of information on web as the other firms in the same industry and if the firm fails to do so then it is considered of hiding bad news. Hence, it is considered as the negative effect of internet use for financial reporting.