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W
ho are the Users ternet, anyone can access the is international. Improv-
of Financial State- information. ing access to potential
ments and how has investors for small com-
the Internet changed the old Advantages of Financial panies.
norms of financial reporting? Reporting on Internet l It offers dynamic updat-
“The users of financial state- What makes the Internet ing potential.
ments include present and poten- potentially useful in corporate l Fewer constraints on pre-
tial investors, employees, lenders, reporting is the fact that it of- sentation flexibility than
suppliers and other trade credi- fers the following advantages: traditional paper ver-
sions.
Traditionally financial reporting by corporates was in print l Access to greater volumes
format and the annual reports were mailed to the users of the of data than previously
financial statements. Financial information was also released possible.
to media by way of press releases. The exponential growth in l Flexibility in user mod-
Internet usage is steadily changing the way users access fi- els of data provided. In-
nancial information. Today, it is imperative for a corporate to creasing the amount and
have a website. Corporates are increasingly using Internet for type of data disclosed and
Shrikant Sortur
Financial Reporting in the last few years. The article throws supplementing traditional
(The author is a mem-
light on the changing scenario of financial reporting, the is- disclosure practices.
ber of the Institute
as well as AICPA, sues involved and the trends in Internet financial reporting in l Hypermedia delivery of
working with Lason
Systems Inc, MI, USA. India and other parts of the world. data (using the inter-
He can be reached at linking of information
shrikant_sortur@yahoo.
com’)
capabilities of the World
tors, customers, governments and l It offers a low cost solu- Wide Web).
their agencies and the public. tion (to both users and l The possibilities for ex-
They use financial statements producers) to access of porting of data for user
in order to satisfy some of their corporate data by using manipulation.
information needs” (Framework an established network l The regular maintenance
for the Preparation and Presen- structure that all can par- of websites means that
tation of Financial Statements’ ticipate in easily. Large the financial information
Issued by ICAI) companies can virtually provided can be kept up-
In countries with ma- eliminate the substantial to-date whereas paper
jor capital markets, almost cost of printing and post- reports have a very short
all large companies have ing annual reports to the shelf-life.
websites and the majority of thousands l It offers possibilities to
these sites include some form l It offers instant (relative enhance the provision of
of financial reporting. A few to paper versions) ac- corporate reports to us-
years ago, the users of finan- cess to data at convenient ers. Some of the advan-
cial statements depended times for users. tages / enhancements are
on the hard copies (print) of l It provides for a broadcast provided in the following
Annual report to reach them. (mass communication) ways:
Not everyone had access to medium for corporate l The use of graphics,
the Annual reports / financial reports. The informa- Ability for download-
information and at times one tion can be accessed by ing of data , Press release
had to either get the informa- a much wider audience provision,Trend Data and
tion from a library or from than more conventional analysis, Dynamic Data
an analyst. With Financial means of communication Provision & Non-finan-
information and Annual re- permit. There are no na- cial measures of perfor-
ports being available on In- tional borders, the reach mance provided
Lamiya Lokhandwala