Transparency


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Transparency

The state in which all relevant information is fully and freely available to the public. Nearly every analyst agrees that transparent markets are desirable because they lead to greater efficiency. Laws and regulations exist in most jurisdictions encouraging or mandating transparency. For example, the SEC requires disclosure forms declaring a great many different actions when or immediately after they occur. Likewise, the Sarbanes-Oxley Act is designed to increase transparency in accounting. A minority view holds that these laws and regulations intended to create transparent markets in fact reduce efficiency. Others contend that markets are efficient with or without transparency. See also: Efficient market hypothesis.

transparency

The full, accurate, and timely disclosure of information.
Case Study Ford Motor Company executives indicated in spring 2001 that the company planned to provide shareholders and analysts with greater transparency of the firm's financial results. As part of the improved transparency, Ford was expected to report separate results from its Premier Automotive Group (PAG), comprising Aston Martin, Jaguar, Lincoln, Land Rover, and Volvo Cars. In the prior year Ford reported an operating loss of $35 million in Europe only because income from PAG and customer services mostly offset operating losses of nearly $1 billion in its other European operations. At the time Ford did not report profits for individual brands or product groups. Transparency permits shareholders and analysts a greater understanding of a firm's operations, including which parts of the firm are most and least profitable. This, in turn, places greater pressure on the firm's management to produce acceptable results in all facets of a company's operations.

Transparency.

Transparency is a measure of how much information you have about the markets where you invest, the corporations whose stocks or bonds you buy, or the mutual funds or other investments you select.

For example, in order to achieve maximum transparency in US markets, the Securities and Exchange Commission (SEC) requires corporations to disclose all information that might have an impact on their financial status so that investors can make fully informed decisions.

Real-time trading information, increasingly available to individuals as well as institutional investors, and linked pricing systems are other steps toward complete transparency.

References in periodicals archive ?
The state has successfully promoted online transparency at the local level," Watson said.
This is clearly reflected in better transparency and disclosures as is evident from the latest BASIC rankings.
One concerned transparency about government operations per se, such as how decisions are made and the nature of detailed budgets.
The conference aims at highlighting the relationship between accountability, transparency and their relationship with HR development and diagnosing the challenges facing the Gulf economies in the light of the collapse of the global stock markets.
The Linaburg-Maduell Transparency Index, developed at the Sovereign Wealth Fund Institute, is based on 10 essential principles that depict sovereign wealth fund transparency to investors.
Roberts offers a paean to transparency on the march.
HealthMarkets' price transparency tools are designed to stimulate competition in the marketplace and encourage pricing conversations between providers and patients, Gedwed said.
Currently, the Pension Protection Act and the Pension Security and Transparency Act call for increasing premiums paid to the PBGC; the Pension Protection Act calls for an increase in flat-rate premiums from $19 to $30, with a phase in of three years and five years if a company was at least 80 percent funded.
Develop innovative training and technical assistance programs to fight corruption and ensure transparency.
It is precisely the different degrees of transparency here, the permeability of interior and exterior walls, windows, and reflected things, that runs against the grain of any metaphoric understanding of transparency.
Why is the AICPA recommending the profession move to an even greater level of transparency in peer review?
Still, others believe it would be better for the profession to increase transparency before the government steps in and does it for them.

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