ABSTRACT
Full disclosure is a creature of the federal securities laws that were enacted during the 1930s in the wake of the stock market crash of 1929 and in the midst of the Great Depression. Full disclosure is thought to discourage undesirable conduct on the part of management because exposure will embarrass executives should they engage in such activity. The English Joint Stock Companies Act of 1856 dropped the requirement for a balance sheet, but a companies act passed in 1862 contained a model balance sheet and income statement. The United States was slow to adopt the approach of disclosure found in the English Companies Acts. The Industrial Commission that was formed by Congress in 1898 issued a report advocating for large corporations the use of independent accountants and annual audited accounting statements that would be made public.
