Journal of Business Ethics 90 (S2):179 - 197 (2009)

Abstract
One of the fundamental principles of good corporate governance is transparency, i.e., the disclosure of private information to external stakeholders, so that they may make judgments and decisions relating to the corporation. Equally important, but less discussed, is the competing value that corporations need to protect legitimate secrets. Corporations thus need a communication strategy for dealing with external stakeholders which addresses the conflict between disclosure and secrecy. This article focuses on an important element of that communication strategy in the context of financial reporting: the possibility that corporate insiders may consider it in their interest, or in the interest of specific stakeholders, to alter or manipulate the financial information that it discloses publicly. Using concepts from the corporate governance and financial reporting literatures, it addresses the ethical question of who (management or the board of directors) should be responsible for making the fundamental strategic choices whether and (if so) how the corporation alters or manipulates the financial information. This article argues that the board of directors is responsible for formulating (and monitoring) the corporation's communication strategy, and that management is responsible for carrying it out
Keywords corporate governance  disclosure  earnings management  ethics of earnings management  financial report management  financial reporting  secrecy  strategic financial reporting
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Reprint years 2010
DOI 10.1007/s10551-010-0381-9
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References found in this work BETA

Ethics Failures in Corporate Financial Reporting.George J. Staubus - 2005 - Journal of Business Ethics 57 (1):5-15.
Privacy.Judith DeCew - 2008 - Stanford Encyclopedia of Philosophy.

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