While financial reporting is critical to the inner workings of every business, it is becoming even more critical to the outside stakeholders of business. Evidence of this can be seen in the demands of investors and government for financial reporting reforms in the wake of recent corporate accounting scandals and financial improprieties. Thus, the demand for better, more timely financial information tailored to a wider audience is more urgent today than ever, and by all indications, the trend will continue.
For example, the Sarbanes-Oxley Act contains key provisions to prevent corporate fraud and restore investor confidence in financial reports, highlighting the need for organizations to produce better financial information and be more accountable. To meet the demands of government agencies, investors, creditors, and others for accurate and current financial information, organizations must be able to disclose correct and timely financial information in varied report styles and formats for distribution, not only within the organization, but outside of it. While financial manipulation resides in the province of ethics, which no financial reporting solution can change, financial reporting solutions must be effective to help eliminate misleading financial statements and valuations. Organizations must put in place financial reporting solutions that, for example, promptly recognize reversals of income that had been booked on the basis of projections, which later may be proven to have been inaccurate. Financial reporting solutions must be able to generate objective and accurate valuations of assets and clear provable balance sheets in a timely manner.