Financial Reporting - Assignment Solved

Added on - 21 Feb 2021

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Financial Reporting
Question 1 Meaning and Purpose of Financial Reporting.........................................................3Question 2 Meaning, purpose and key principles of Conceptual and RegulatoryFramework.....................................................................................................................................4Question 3 Main stakeholders of organization and how they could be beneficial fromfinancial information of company................................................................................................5Question 4 Discussing value of Financial Reporting for meeting organizational objectivesand growth......................................................................................................................................6REFERENCES..............................................................................................................................8
Question 1 Meaning and Purpose of Financial ReportingFinancial Reporting can be defined as the preparation of Financial statements of companyin order to provide information to management. Preparation of Financial statements includes thevarious items such as Income statement, Balance Sheet, Cash Flow Statement and change inequity (Financial Reporting, 2019). These financial reports help the management in evaluatingand analyzing various deviations in the company and what corrective measures should be takento control those deviations. It also helps in investors of the company to know whether theinvestor should invest in the company or not. The reports are the basis for statutory audits andhelps the management in decision- making for company. It also sets benchmark for thecompetitors in order to achieve the set targets for the company. There is mainly two purpose ofFinancial Reporting which are as follows -Helps in decision- makingFinancial Purpose helps the management in taking several decisions for the company.Management evaluates the performance of company by analyzing past Financial statement ofcompany and tries to know in which department variations have been occurred (Acharya, 2016).By knowing the variations management take corrective actions for setting up the targets inpreparation of new budgets for organization. It also helps in making various strategies and policyframework for the firm.Provides information about Financial Position of organizationFinancial reporting helps in preparation Financial Statements for company whichprovides information for investors, creditors and other stakeholders who are interested inknowing the financial position of firm. This information helps creditors in knowing that whetherthey should lend more money to company or not. Information also helps Government in knowingwhether the company is paying full taxes as per Income earned by organization. It helps inknowing that whether company is preparing financial statements using all rules and regulationsor not.Other purpose of financial reporting isPreparation ofIncome statement helps in knowing the profit or loss earned by thecompany in order whether organization is performing positively or not;
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