Future of financial reporting on the internet
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Until recently, the accessibility of a company's financial statements (income statement, balance sheet, cash flow statement and notes thereto) was limited to printed hard copies. The development of the World-Wide Web made it possible for companies to explore alternative routes for the distribution of financial statements. A report published by the Financial Accounting Standards Board (FASB) (2000) lists the following reasons for companies to publish financial statements on the Internet: Reducing the cost of and time to distribute information; Communicating with previously unidentified consumers of information; Supplementing traditional disclosure practices. The Companies Act and the Johannesburg Stock Exchange (JSE) govern the distribution of financial statements in South Africa. Despite all the technological developments and the advantages related to Internet reporting, both the Companies Act and the JSE stipulate that annual financial statements should at least be distributed in the printed hard copy format (South Africa. Companies Act, Act 61 of 1973, Section 302). It should be noted that all financial reporting on the Internet are voluntary. A study done by Allam and Lymer (2002) on the 50 biggest companies in the USA, UK, Canada, Australia and Hong Kong concluded that 99,6% of these companies have Web sites. It was found that all of the companies with Web sites supply their financial statements via the Internet. In this research it was found that the largest (in terms of market capitalization) companies in South Africa have working Web sites and that all of them supply financial statements on their Web sites.
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