Footnote disclosure. Your audit client believes that disclosing everything is the safest action to take today. Management believes that if the company tells outsiders everything it is required to tell them as well as additional information, they will not complain that they did not have sufficient information to make decisions about the company. Your client knows that there is a cost to gathering the information to disclose, but the company wants to distinguish itself from its competitors by offering very thorough disclosures. The client asks your advice about this approach.
a. What would you tell the client? What are the positive and negative outcomes from this approach?
b. Is more information always good? Would you recommend that the client fol low this approach to financial statement disclosure?