The accounting profession considered increasing its required disclosures and the type of information that is required from public companies. The following paragraphs appeared in The Wall Street Journal (August 26, 1993, p. A4):

A key accounting group calls for a sharp increase in the amount of information companies must disclose in their annual reports. The prospect alarms corporate financial officers.

If adopted, the recommendations could force companies to change the way they figure profits. It could make them disclose more data about the competitive pressures they face. They could transform the auditor’s report from the current boilerplate message to a longer and much more revealing statement about the company’s health. Information about changes in the firm’s product prices in response to competitive price shifts would be required.

The new requirements would favor more segmenting of data so that sales and profits for each company unit would be shown. More meaningful breakdowns of company data would be required. Much more data would be required from larger companies than from small companies.

Required Write a short memo to the key accounting group noted in the article from the perspective of a company president, responding to the proposed changes in accounting disclosures. p-968