[jimnotgym]

This is an interesting anomaly in the US. In the civilised world all corporations have to file public accounts, as the price for their limited liability. The detail and audit requirements depend on the size, turnover, staff numbers etc. This is because the shareholders are not the only stakeholder. The companies creditors, for instance, who are exposed to the limited liability have a right to see what they are lending to.

To answer the sibling comment, all of these public accounts follow local GAAP or IFRS.

The US still astounds me with its willingness to allow corporations to rip people off!

[kortilla]

Creditors in the US can make visibility into financials a requirement for financing if they want. Protecting creditors isn’t a good argument for public reporting.

[jimnotgym]

What about potential employees, can they look? The local community that consents to let the company build and operate in their town? How does that help, if they don't follow have to follow GAAP anyway?

[kortilla]

Why are those things relevant to either employees or a town?

Most of the US is at-will so the financial health of the company is unlikely to be the reason you’ll suddenly lose a job.

Same for a town, if you’re structuring a deal that has counterparty risk then you mitigate the risk. If an employer is just leasing some office space in your town, why in the world would you ever even think you had the need to look at their financials?

[VBprogrammer]

What are the arguments against public reporting?

As a consumer you are often sending deposits or even the full cost of goods to companies some time before you receive those goods (in effect you become a creditor). You are also dependent upon some of those companies for service and repairs. It seems reasonable that you can check the finances of a company you are creating a business relationship with, I know in the past I've checked company statements.

You are unlikely to have significant enough sway to force that kind of disclosure. Small businesses as consumers have less legal protection and are similarly unlikely to be able to make disclosure a precondition of a deal.

[nradov]

So what. As a customer you can insist on seeing audited financial statements as a condition of purchasing, or purchase from another vendor, or do without. No problem.

[VBprogrammer]

Or, in the real world, running a limited liability company could come with some sensible reporting requirements?

[nradov]

Why? And what's sensible about it?