RESPONSES TO DISCUSSION QUESTIONS 1
Responsesto Discussion Questions
Graphicalrepresentation of profit and loss information to the stakeholders hasa number of limitations. First, stakeholders are known to demandclarity to where their investments are handled. However, when profitand loss information are explained through graphs, there are highchances the information will be full of mistakes and avoidable errors(Williams, 2011). Since there is complexity in graphicalrepresentation, the information will not be accurate. This therefore,causes a lot of problems for clear understanding to the stakeholders.Graphical representations do not have secrecy, which may go againstthe stakeholders’ wishes, since it hampers some of the objectivesto keep some of the information secret (Williams, 2011). Again, thereis an issue of understanding. Some of the stakeholders may not be ina better position to understand since it involve technical terms, andmay appear complex.
During preparation and presentation of financial graphs, there areethical issues that should be put into consideration. First,financial graphs should be prepared by putting the client’s, whichin this case, are the stakeholders’ interests. This considerationis conceptually one step towards ensuring the stakeholders arewell-placed to understand the information, and that their interestsare well-handled within the organization (Javech & Ben, 2013).Secondly, financial graphs should be prepared by according propercare of a real fiduciary, other than merely the stakeholders’interests. This way, financial graphs will show the stakeholders thattheir planners and presenters are held in better legal standards thanbefore.
Interpretersof financial graphs, towards arriving at the correct conclusions,should ensure that the graphs represent better understanding of thestakeholder’s expectations and future objectives of theorganization. The interpreters should ensure that correct applicationof modern financial in the graphs, should boil down to having thestakeholders understand exactly what the information means and why(Higgins, 2013). Again, interpreters should make it clear about allthe costs and risks in every financial detail given in the graph.This way, one will be in a better position to understand theramifications and recommendations to make.
Higgins, K. L. (2013). Financial whirlpools: A systems story of thegreat global recession. The Journal of Financial Research.Kidlington, Oxford, UK: Academic Press.
Jayech, S., & Ben, Z. N. (2013). Measuring financial contagion: Adirected acyclic graphs and error correction model. InternationalJournal of Business Innovation and Research, 7 (1), 40-60.
Williams,R. T. (2011). An introduction to trading in the financial markets:Market basics.
Journal of financial economics. Burlington, MA: AcademicPress.