Answer:
The correct answer to the following question will be "Full Disclosure Principle".
Step-by-step explanation:
- The idea of full disclosure is a rule that allows a corporation to disclose to any person who is used to reading such material the necessary information about its financial statements and other related information.
- It states that almost all information would be included in the financial reports (profit and loss account and balance sheet) of an entity that would provide investor's knowledge about the yearly financial position of a firm. The understanding of this concept is extremely judgmental, as the amount of information that could be distributed is potentially significant.
Therefore, this type of principle is highly used by firms.