Financial Markets



Understanding Stock Option Information

Introduction

This project encouraged me to keep track of what's going on in the world today. I never read much, but then I realized that the key to succeed is to be always reading and being actualized. We have to be aware of every detail that is happening around the world because anything can turn the market around. At the beginning I had no idea how to trade, and I didn't know what to invest in. Then after reading the Wall Street articles on the stock options information of various companies.

The entire idea was to create a well-diversified portfolio, where I spread out my investments in order to reduce risk. By spreading out my portfolio I was able to invest in different investment vehicles, such as stocks and mutual funds. My idea was to reduce risk as much as I could so I choose securities from different industries and location.

The topic that I have chosen for this report is “The impact of corporate governance mechanisms on the quality of financial reporting.” This study holds an immense importance in the field of finance because financial reporting is one of the most crucial aspects for any company as it highlights the financial position of companies upon which depends their success. In order to rightly report the financial position of a company, good corporate governance is essential. The corporate governance are the oversight actions undertaken by the audit committees and board of directors in order to make sure the financial disclosure process holds integrity. Acoording to the Organization for Economic Cooperation and Development (OECD), corporate governance is a set of relatiohs between the management of a company, its stakeholders, its shareholders, and its board of directors. Corporate governance is almost certainly the major control mechanism that is used for proficient utilization of business resources (Baygi, et al., 2012, p.2). It involves management, audit committees, and internal, and external auditors. As the link between company's financial reporting system and its directors is really crucial, where, one of the most significant function of the corporate governance is ensuring the process of financial reporting. However, the accounting scandal proliferations have prompted the requirement of improving the relevance of financial reporting by developing enhanced governance structures. According to Nesrine Klai and Abdelwahed Omri, in perspective of developed countries the relation between information quality and corporate governance is strongly debated, and only recently the attention has diverted towards evaluating and studying the governance and financial disclosure in emerging countries (2011, p.158). Thus, the attention is now diverted towards evaluating this relation and studying its effectiveness.

The mechanisms of corporate governance is of high concern to investors of a company because these meachnisms strenghthen the quality of financial reports which is among the top priorities of investors. Furthermore, financial statements holds immense importance for investors and therefore highly impacts on their investment decisions, so enhancing the quality of financial disclosures must be the be the corporate governance priority in any organization (Tsamenyi & Uddin, 2009, ...