Corporate transparency refers to an organization's deliberate efforts to provide the public and stakeholders with accessible and verifiable information regarding its financial standing and corporate activities. Financial reporting helps ensure corporate transparency. It involves collecting and assessing financial data to evaluate a business’s performance. Several best financial reporting practices, such as familiarity, confirm the authenticity of financial reporting.
Familiarity with financial reports must become a core of business operations. Because there is a wide range of financial reports, organizations and leaders must streamline them from the most essential to the least essential. Examples of essential financial reports include balance sheets, income statements, AR aging reports, and statements of cash flows.
In addition, the figures from financial reports must tally without any discrepancies. A lack of consistency in the statistics generated makes financial analysis and projections difficult and almost impossible.
Finally, an organization should invite external auditors to ensure the credibility of its financial reports. Because external auditors do not have personal interests in the financial reports, they enhance public trust.
