Recording also will classify and summarize economic events. The bookkeeping function is included in the recording of economic events. Accounting reports are then communicated to interested internal and external users by means of financial statements. Internal interested users are individuals inside the company who plan, organize and run the business. These users can be comprised of finance directors, marketing managers, human resources, or management.
Financial Statement Report ACC/290 06/03/2013 Lisa Henderson Financial statement is an expression used when referring to end of the month reports such as an income statement, balance sheet, cash flow statement, and Retained Earnings Statement. These statements are also known as the final accounts. The income statement is a financial statement that aids in estimating the gross and net profit of a business for a specific time period. Many companies put together income statements so they can evaluate proceeds with expenditures to verify their performance. If the income of the business is more than the expenses then the company has made money and vice versa.
However, an implicit assumption is that users need reasonable knowledge of business and financial accounting matters to understand the information contained in financial statements. This point is important. It means that financial statement pre- parers assume a level of competence
Two main groups of users of financial information are internal and external users. Internal users are individuals who help operate the business within an organization such as managers, employees, supervisors, directors, etc. Upper management frequently makes planning and controlling decisions based on the financial information gathered. External users are those individuals and institutions that want financial information about specific organizations. For example, external users such as investors, creditors, and bankers receive this financial information by reading the reports and determine if a specific company is worth investing
It is a review of management and how operating procedures work. How effective and efficient the procedures are for the company. Although operational audits reveal possible problems in the financials statements, a compliance audit and fraud audit will help Whitfields internal
Or Financial statements (balance sheet, income statement, statement of cash flows, and statement of stockholders’ equity) are the primary means accountants use to communicate financial information to investors, creditors, regulatory agencies, and others. Choose one of these financial statements and provide an example of the statement from your current organization, if possible. Provide a brief analysis of what is contained on the statement. The text identified three common legal forms of business organizations: sole proprietorships, partnerships, and corporations. IF you were to start or your business (or if you already have started your own business) what type of legal form would you use?
This expression is also used as a general evaluation of a firm's overall financial health over a given period of time, and can be used to compare related firms across the same industry or to compare industries or sectors in aggregation. While evaluating financial performance for our companies we can take help of the financial ratios as well. According to Barron the performance of a business enterprise is affected by its strategies and operations in market and non-market environments. (Baron, 2000) Financial ratios are an important element in determining the performance of an organization. Financial ratios should be analyzed by a professional accountant.
Financial Statements Paper Ambar Rivera ACC 290 Stephen Wilson January 24, 2012 The four basic financials statements are balance sheet, income statement, retained earnings statement, and statement of cash flows. The balance sheet shows a picture at a point in time of your business’ assets (owns), and your business‘ liabilities (owes). An income statements reports the business revenues and expenses during a period of time. Presenting a retained earnings statement, indicates how much of the previous income was distributed, and how much was retained in the business to allow future growth. The statement of cash flows contains the information to show where the business obtained cash during a period of time and how that cash was used.
These indicators go beyond financial statement figures, such as sales and net income, to include measures tailored to the client and its objectives. Such key performance indicators may include market share, sales per employee, unit sales growth, unique visitors to a Web site, same-store sales, sales by country, and sales per square foot for a retailer. ASSESS CLIENT BUSINESS RISK The risk that the client will fail to achieve its objectives related to (1) reliability of financial reporting, (2) effectiveness and efficiency of operations, and (3) compliance with laws and regulations PERFORM PRELIMINARY ANALYTICAL PROCEDURES a. Auditors perform preliminary analytical procedures to better understand the client’s business and to assess client business risk. One such procedure compares client ratios to industry or competitor benchmarks to provide an indication of the company’s performance.
The external source documentation can serve as the confirmation of the internal documentation. 7-28 1. Review the accounts receivable with the credit manager to evaluate their collectability. Inquiries of the client. 2. Compare a duplicate sales invoice with the sales journal for customer name and amount.