Question

1. External users generally depend on the financial statements prepared and published by an organization to provide the information they need for decision-making. The Internet and database technology make it possible for an organization to allow external users to have access to detailed transaction data on an ongoing basis. What are the advantages and disadvantages of such an arrangement to external users and the organization?

2. The use of a worksheet is an optional step in the accounting process. Many accounting software applications do not support the generation of a worksheet. Is the worksheet becoming an antiquated concept?

Answer 1

As per policy, only one question is allowed to answer at a time, so answering Q1 here :

The advantages to External Users of disclosure of information on an ongoing basis:

1) The unacceptable transactions and corruptions would be interrupted at its origin.

2) The investors activities in the stock market increases through rush of profitable transactions.

The disadvantages to External Users of disclosure of information on an ongoing basis:

a) The following of transaction to transaction data is difficult and not practical.

b) The analysis of each and every transaction on the final results is difficult to do.

c) The percentage of key transactions affecting the economy or investors right is very thin.

The advantages to the organization of disclosure of information on an ongoing basis:

i) As the all transactions are in the public domain, so postmortem analysis is essential.

ii) The management do not have to pay attention on the affect of the transaction on economy.

iii) More attention on doing transactions then analysis and replying on the effect of the same.

The disadvantages to the organization of disclosure of information on an ongoing basis:

I) The unwanted transaction of the organization has to be disclosed to public.

II) The protection of the management confidential and secret strategies become difficult.

III) The importance of the final results of the company would get reduced.

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