Clear Beyond Words   The More Carrot Blog

Are corporate disclosures useful or redundant? Yes

by Josiah Fisk, January 4, 2016

Gretchen Morgenson nicely captures the debate over a possible change in accounting rules as to what is “material” for corporations to disclose to their investors.

Investor advocates say that investors find existing disclosures of material developments very helpful. Many corporations appear to think that the disclosures are redundant.

Both have a point. The content of the disclosures can be very helpful. But the way they’re written often isn’t.

When you’re writing disclosures, the easiest way to make sure you have been complete is to be redundant. And since there may be overlap in what is said about one risk or new development and another, you can get more redundancy there.

Deciding what needs to be disclosed is mainly a job for accountants, attorneys, and executives. Deciding how best to disclose it is a job for communications specialists.

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