Abstract

Recent indication by the Securities and Exchange Commission (SEC) that financial disclosure requirements for multi-market and/or multi-industry, conglomerate, companies may be changed is a significant issue for the business community. For conglomerates the SEC has proposed a specific breakdown of how each major product line or service contributes to net income, as opposed to the present extensive use of consolidated income statements. Management performance is difficult to evaluate in the absence of prior agreement regarding management goals and preferences, but very little agreement has been reached. However, it appears clear that management decisions are constrained by shareholders' choices and government restrictions. Presumably, management has a real responsibility to shareholders as well as to a number of governmental agencies which use various direct and indirect methods to enforce claims. Provision of certain type, of information is largely determined by governmental agencies such as the SEC and the Internal Revenue Service.