What are the two schools of thought regarding the worldwide trend toward increased financial disclosure by publicly traded firms. Explain which school of thought you hold to and why

What will be an ideal response?

Answer: The student must give his/her own opinion and supporting background. In either case the following should be noted: Increased disclosure should decrease uncertainty thus increasing stock price. However, increased disclosure requirements result in increased costs in the form of initial preparation of financial statements, on-going costs associated with regular development of financial statements, and the costs of gathering and distributing information about the form on an on-going basis. As the authors state, disclosure is a two-edged sword.