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Financial Reporting Assignment Solved (Doc)

   

Added on  2021-02-19

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FINANCIALREPORTING

Table of ContentsINTRODUCTION...........................................................................................................................31. Context and purpose of financial reporting:............................................................................32. Conceptual and regulatory framework along with qualitative characteristics of information:......................................................................................................................................................43. Main stakeholders of an organisation and explain how they benefit:......................................54. Value of financial reporting for meeting organisational objectives and growth:....................75. Present the main financial statements:.....................................................................................76. Interpret and communicate the financial performance:...........................................................97. Difference between IAS and IFRS:.......................................................................................118. Benefits of IFRS:...................................................................................................................119. Identify the varying degrees of compliance with IFRS:........................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14ANNEXURE..................................................................................................................................15

INTRODUCTIONFinancial reporting is combined set of activities and practices which are dedicatedtowards prompt presentation and reporting of monetary events and other business transaction insystematic and regularised manner. Practices involved in financial reporting ensures proper andeffective compliance of relevant accounting policies, procedures and other statutoryrequirements. Financial reporting requires disclosing fiscal data over a defined time period to themultiple stakeholders on organisation's fiscal efficiencies and performance position. Thesestakeholders involve–shareholders, investors, government bodies, banks, debt providers. Thepurpose of study report is to enhance comprehension of financial reporting as well as itssignificance to enterprises (Billings and Lewis‐Western, 2016). Its aim is to continue providinginformation and inputs to a company's management, which are used for monitoring, evaluation,performance metrics and decision-making purposes. As a junior auditor of a large accountingand consultancy enterprise, Smith & Williamson, a FTSE company is selected to better explainall the above-mentioned terms and that company is Tesco. The study evaluates main context and aim of financial reporting, major qualitativefeatures which required to generate reliable financial, corporation's stakeholders and importanceof financial information and role of financial-reporting. Moreover, it contains practical sumrelated to preparation of IAS based financial statement. It also contains key departure betweenIFRS and IAS and degree of compliances related to them. 1. Context and purpose of financialreporting:In commercial environment, financial reporting has now been known to play a crucialrole in the development and establishment of the global financial system. The principal purposeis to ensure that users have data and facts that is efficient and valuable so that significant choicesare made in order to improve enterprise effectiveness. Managers need an annual reportsummarizing the effectiveness and the condition of their corporation to assess how often theyhave achieved their business throughout an accounting period. Financial reporting is alsoconcerned with adoption of regulatory and compliance framework-based structure (Cohen andKaratzimas, 2015). Reporting in corporations is done by accountants and management personnelon periodical basis like annual, quarter, monthly etc. For both internal and external purposesfinancial reporting is used by corporations which ultimately supports decision-making. It is the

presentation of corporation's significant monetary information & certain operations to differentstakeholders to support them at every stage in period get core performance information aboutincorporation. In this context following are core purposes linked to financial reporting, asdiscussed below:Financial reporting's principal aim is to avoid conflicts related to accounting proceduresadopted by ensuring proper compliance with accounting standards like IAS, IFRS etc.Main purpose behind adoption of Financial reporting is that it facilitates effective linkingof organisational objectives and decision-making processes with company's accountingframework dedicated to present and prepare fiscal reports.It facilitates effective and prompt decision making for investors by providing key fiscalreports and statements. It aims to remove any misleading information. which can be reported in financialstatements of corporation (Dichev, 2017). It supports management of major productive activities of company by providing usefuland quick information.Provide relevant information through financial statements based on which banks andfinancial institutions provides loans and credit-related facilities.Financial reports generated under process of financial reporting build trust in users ofcorporation's financial reports. 2. Conceptual and regulatory framework along with qualitative characteristics of information:Conceptual and Regulatory framework: Regulatory framework is a mechanism whichassure effective compliance of rules and regulations issued by regulatory authorities. It aims toassure that individuals obtain a reasonable level of information to make massive decisions basedon their concern in reporting organization. While a conceptual framework relates to coherent structure of interlinked principles andobjectives (Durnev and Magnan, 2017). A framework that sets out the essence, feature, andboundaries of business's financial accounting as well as reporting. Conceptual frameworks mayextend to plenty of areas, but where particularly relating to financial reporting is concerned, aconceptual framework could be viewed as a declaration of GAAP that constitute a referencepoint for evaluating current practices and developing fresh ones. Conceptual Framework's aim isto assist in preparation of financial statements in developing accounting-policies for events or

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