Explain Financial Management and Reporting Standards

This assignment provides an overview of financial management and reporting standards. It explains the principles of costing, cost control systems, and the importance of managing financial resources. The report also discusses regulatory requirements, competitive factors, and legal requirements in financial resource management. Key concepts such as accountability, audit, and legislative frameworks are covered in detail.

MANGING FINCNCIAL
RESOURCES

Table of Contents
INTRODUCTION...........................................................................................................................1
1.1 Explain the principles of costing and business control systems...........................................1
1.2 Identify information needed to manage financial resources.................................................2
1.3 Explain the regulatory requirements for managing financial resources................................3
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5
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INTRODUCTION
Finance management is the branch of management studies. It contains the knowledge and
information related to managing the financial resources (Financial management and
arrangement of finance resources, 2017). This assignment highlight the cost principle and cost
control system used by the organisations. Essential information related to managing financial
resources also explained in this context. Regularities and authorities related to finance resources
management discussed in this report.
1.1 Explain the principles of costing and business control systems
Cost principle is guidelines of the basic underlying in the accounting. Cost principles
needs that assets should be recorded at cash amount when assets is to be acquired. In costing
involves belief and also system for identifying price of services as well as products. There are
some principles of costing which are given below as above:
Costs- It refers to that amount which has to given or paid up in context to get some thing.
It is a money value which has used to produce or deliver goods and services in an effective
manner. Cost is usually in terms of money . Basically two type of costs are fund in organisational
context such as variable cost and fixed cost.
Cost benefit analysis- CBA is a technique of analysing the benefits of cost system. It is a
technique which helps to determine the strength and weakness of alternatives cost options.
Expenditure- Funds and amounts which are utilised for a specific purpose are called as
expenditure. It indicates towards the payments made for manufacturing goods and run the
operations.
Budget- These are the plans which provides forecasted informations subject to allocating
resources for future operations and management. Budgets are prepared with the help of past
financial records and information.
Cost control- This is considered as a practice to determine the cost of the resources and
find put the methods and techniques to reduce the operating and administrating expenses of
organisation.
Cost centre- these are known as sections and departments on which cost would be
allocated and implemented. This indicates towards those costs which are not directly incurred in
business operations.
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Outsourcing- Facilitating financial services and providing financial solutions are
considered as outsourcing of financial resources. Management level plays crucial role to
outsources the financial services.
Competitive tendering- Analysing the trend and perspective of competitors are called as
competitive tendering. This is the procurement method used in public and private sector
organisations. It forces suppliers, buyers and taxpayers to attain wanted wanted results.
Forecasting profitability- Evaluating the future possibility of earning revenues and profit
are considered as forecasting profitability. This is the method of analysing the return on
investments, technical innovations and inventories.
Break even- This indicates towards the point of sales and turnover at which the income
and expenditure remain equal (Nedeva, Boden and Nugroho, 2012). Break even shows the no
profit and no loss situation of an organisation.
1.2 Identify information needed to manage financial resources
Business cost
All the expenses and cost which are incurred in operations and management are called as
business cost (Ledgerwood, Earne and Nelson, 2013). It contains all the cost and expenditures
made for arrangement of resources for operating business operations. Information are required
from from various departments of company such as:
People- These is one of the essential element of business. People of the organisations are
called as human capital and human resources of organisation.
Equipment- these are the tools such as machinery and system used to manage and
operate the business operations.
Finance- This is one of the important sources of business and organisation. Without
finance operation and management remain worthless. Finance resources remain responsible to
arrange all other resources in organisation.
Building- In accounting language building is considered as non current, fixed assets or
long term asset . The amount utilised to but the building is considered as acquisition cost of
building and assets.
Consumable items- Goods and items which life remain limited for a specific duration are
called consumable goods or non durable goods.
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Administration- management department of organisation which deals with the day to day
transactions and operations are called as administration department. Managers and leaders
remain the part of administration department of the company.
Income streams
There are some certain accounts and sections are maintained by the organisation to
manage members account, government acts and policies and minimum amount paid by the
members for per year.
Change in policy- policies indicate towards operating the departments by adhering
policies and guidelines. Informations related to cost accounting principles, accounts and financial
rules are required to make policies.
Competitive factors- Informations related to competitive factors remain essential to
promote product and services in market (Cardinaels and Soderstrom, 2013). This factors are
essential in respect of maintaining customers ratio.
Legal requirements- Policies and rules related to health and safety of employees.
Legislations and guidelines related to retaining the financial records and accounting
informations.
1.3 Explain the regulatory requirements for managing financial resources
Legislations and code of practice- Legal authorities and legislations are made to manage
and corporate the financial and accounting principles. FRC (Financial Reporting Council) and
ASB (Accounting Standard Board) produce the rules and policies for financial reporting. FRC
100 covers the rules related to financial reporting requirement.
Audit- it indicate valuation and checking of accounting reports and financial statements.
Competition and market authority (CMA) is made which contains the rules related to auditing of
FTSC 350 companies (Ndenje-Sichalwe, Ngulube and Stilwell, 2011). International standard on
auditing 500 covers the rules related to audit evidence.
Accountability- It simply defines the reliability of accounting standards, policies and
assumptions used by the organisation properly and syntagmatically. This contains the
responsibility subject to financial reporting and performance management. It is considered that
accounting records and financial statements must be prepared as per the legal structure and
accounting policies. Irrelevant concepts and assumptions should not be considered in finance
management.
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CONCLUSION
Management of financial resources and reporting standards are described in this report.
Short description on cost control system and principle of costing overviewed in this report.
Essential informations which remain important to managing finance resources are defined in
with particular elements.
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REFERENCES
Books and Journals:
Ledgerwood, J., Earne, J. and Nelson, C. eds., 2013. The new microfinance handbook: A
financial market system perspective. World Bank Publications.
Cardinaels, E. and Soderstrom, N., 2013. Managing in a complex world: Accounting and
governance choices in hospitals. European Accounting Review, 22(4), pp.647-684.
Nedeva, M., Boden, R. and Nugroho, Y., 2012. Rank and file: Managing individual performance
in university research. Higher Education Policy, 25(3), pp.335-360.
Ndenje-Sichalwe, E., Ngulube, P. and Stilwell, C., 2011. Managing records as a strategic
resource in the government ministries of Tanzania. Information Development, 27(4),
pp.264-279.
Online
Financial management and arrangement of finance resources, 2017. [Online]. Available
through:<https://knowhownonprofit.org/organisation/operations/financial-
management/management>.
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