Congress do not wish to impede the ability of companies to raise their capital through their stock offerings by requiring full disclosure, but they hope to keep the market honest and fair.
This way you assure stakeholders such as creditors and investors that they are aware of the any relevant information and are fully informed about the company when making business decisions concerning the company. Example of the full disclosure principle Company X purchased a piece of property, and are now the current owners.
Public accountants prepare detailed financial statements. There are specific things that individuals selling a property are required by law to disclose to their buyers. In and the Securities Act and Securities Exchange Act brought the concept of full disclosure into the world of business.
Most companies will come across a full disclosure requirement at some point as they're doing business. Full disclosure also refers to the general need in business transactions for both parties to tell the whole truth about any material issue pertaining to the transaction.
As a business, there are a number of accounting principles you are required to follow and oblige, including the full disclosure principle. Was this document helpful?