Comprehensive Analysis of Financial Reporting for Tesco: A Report

This report provides a comprehensive analysis of Tesco's financial reporting practices. It begins with an introduction to financial reporting, its regulatory framework, and the role of governance. The report then delves into the purpose of financial reporting, emphasizing its role in achieving organiz...Read More

FINANCIAL
REPORTING

Table of Contents
INTRODUCTION..........................................................................................................................3
TASK 1..........................................................................................................................................3
P 1. Regulatory framework and governance of financial reporting...........................................3
P 2. The purpose of financial reporting .....................................................................................5
P 3. Interpretation of the financial statements ...........................................................................6
P4. financial ratio for the organizational performance and investment.....................................8
LO 3 ............................................................................................................................................11
P 5 Benefits of the International accounting standards and the international Financial
reporting Standards..................................................................................................................11
P 6 Evaluating the models of financial reporting and auditing................................................13
LO 4.............................................................................................................................................15
P 7 Difference and the importance of the financial reporting across all over the world among
different countries....................................................................................................................15
CONCLUSION............................................................................................................................17
REFERENCES.............................................................................................................................18
Books and Journals..................................................................................................................18
Online.......................................................................................................................................19

INTRODUCTION
Financial reporting refers to the presentation of financial information like the financial
data, financial statement to the users. The users of the organization are the people who directly
or indirectly affects the performance of the organization such as creditors, debtors, customer,
employees, stakeholders etc. The purpose of making financial statements is to present the
financial condition of the company in the market to pull the investors. Besides the financial
statement financial reporting also includes the auditors report, management letters, shareholder
minutes and the financial statement notes.
Tesco is a multinational company who deal in all over the world. It provide various
product and services like groceries, food items, clothing, beauty products etc. in the market. It
has its own websites to provide the product online and solve the queries of the customer. Tesco
represent their financial report in annual meeting to disclose their financial conditions, growth,
decision toward the stakeholders.
The report highlights the meaning of financial reporting and the role of regulatory
framework and governance in financial reporting. It helps to analyze the purpose of financial
reporting in the organization and how it works to meet the financial objective, growth and
development of the organization. It represent the financial statement like balance sheet, cash
flow and profit and loss account of Tesco and the different ratio to evaluate the performance.
The report highlights the benefits of international accounting standard and international
financial reporting standard in the organization and in making the financial report. It helps to
evaluate and maintain the financial reporting and auditing. It also help to analyses the
importance of financial reporting in different countries.
TASK 1
P 1. Regulatory framework and governance of financial reporting
Financial reporting refers to the full disclosure of the financial position like the assets
and liabilities of the organization, the cash inflow and outflow etc. It present in the annual
reports of the company to aware the stakeholders about the financial condition. Stakeholders
include the creditors, public, investors, government and debt providers. The financial data are
present annually, half yearly, quarterly and monthly. The components of financial reporting are
financial statements, the notes to financial statements, quarterly and annual report, prospects
and management discussion and analysis. Tesco report their financial statement under the UK

generally accepted accounting concept. This guideline provides the general rule and regulation
which have to followed by the Tesco. It helps to raise the capital for the organization by
showing the profit of the company in the market. It also increases the reputation and sales of
Tesco which ultimately increase their market share and profit.
The regulatory framework helps in insure that the information are present in required
form to meet the requirement of stakeholders. The regulatory framework provide guideline to
Tesco to ensure that the information are present in useful manner so the investor can get the
proper knowledge about the financial statements and help them to invest in the organization. In
UK, the accounting standard board issues the financial reporting standards to regulate and
control the companies to follow this standard in the organization. Tesco follow the regulation of
regulatory framework in their organization and present their financial statement in board
meetings and annual reports. The guidelines of the regulatory framework provide the rules and
regulation to insure the accuracy, comparability and consistency in financial results. The
regulatory framework regulate the behavior of various directors and the companies toward their
investors. The presentation of financial reporting helps to pull the investor and customer toward
the organization.
The financial governance describe as a way to collect, monitor, control and manage the
financial information in the organization. Ii helps Tesco to track the financial transaction,
compliance, manage and control the data and disclose the related information to the
stakeholders. The financial governance is useful for the organization because it helps to check
the accuracy of the data. The function of financial governance to ensure that the collected
financial data are correct. Financial governance includes work flow, financial policies, internal
controls, financial control, internal and external audit, data security etc. The proper financial
governance help Tesco in preparing the accurate plan, models, budget and forecast demands.
The internal and external audit of Tesco regulate the financial report and suggest the
organization for the valuable improvement in the company and make audit report to ensure that
Tesco follows the norms and regulation of the government. It allows Tesco to analyses the risk
and market condition easily and make the improvement in the organization. To improve the
financial governance Tesco control and automate the financial data, conduct the risk assessment
to measure the risk, regulate the compliance regulation and make the necessary changes.

P 2. The purpose of financial reporting
The purpose of preparing financial reporting is to present the data publicly and invite
them to invest in the organization. It helps to meet the organizational objective, development
and growth. The financial report help to make the useful decision, make proper budget and tax
payment. The financial report provide the proof to the customer about the success of the
organization. This increase the interest of the customer toward the organization and influence
them to invest in the organization.
Organizational objectives : Financial reporting helps to achieve the organizational
objective such as increase the market share, attract customer and satisfy their needs, increase
productivity and the profitability of the organization. The financial statements and the auditors
report shows the profitability and performance of the organization to the stakeholders and the
clients which helps to attract and invest in the organization.
Tesco disclose the profit ans loss of the company, the assets and liability of the
particular accounting period in its annual report. The regulatory framework provide guideline to
the organization to set their criteria and define their business through the annual reports. To
manage the liability and debt Tesco can achieve the objective of the organization. It describe the
performance of the organization and help to compare the past record with the current records
and analyses the gap. To find the gap in Tesco the manager can easily set the new technologies
to improve their performance and achieve the objectives of the organization.
Growth and development : Financial reporting is important for the growth and
development of the organization. The purpose of financial reporting to present the data in such a
way so the organization can grow and develop in the global market. The investment of the
investor provide sufficient fund to the Tesco to plan the activities and promote their product and
services in the market so they can achieve their target.
The shareholder minute is the written record of all the actions or decisions of the
organization. It helps to aware the shareholders about the decision and activities of the
organization and connect them to the organizational activities. Financial reporting is the
backbone of the financial management, planning, analyses and bench marking. It helps to
achieve the target and help the shareholder to gain more profit through the growth of the Tesco.
The public can understand the performance and the management of the organization through the
financial reporting and make the decision of purchase the product and services of the Tesco

company. Getting the success in the market by the financial report motivate the employees
improve their performance which ultimately develop the new skills in the employees. It
explains the assets and liabilities of the organization and their profit and loss account to measure
the net profit and invest the profit in the organization after distribute the share and salary to
grow in the market. Financial reporting helps to identify the trend in the market and create
opportunities for the company to get the grater market for growth and development.
P 3. Interpretation of the financial statements
Financial statements represent the financial position of the organization. The financial
statements includes the balance sheet, income statement and the cash flow of the organization.
Income statement : Income statement use to present all the sources of the income and
the expenditures of the Tesco. It helps to balance the expenditure with the income of the
organization and increase their profit by minimize the expenditure. The income statement
include the various elements such as :
Revenue : The revenue of the organization represent the total sale in a particular
financial year. It is the income of the company by selling the products and services of the
Tesco. Some company generate revenue by selling the royalties, interest and from the other
charges by the organization.
In 2017 the revenue of Tesco is $55,917 which increase to $63,911 in 2019 which
represent that the company improve their performance by generating the higher income from its
sales. The various promotional activities of Tesco help them to attract the customer and
generate the profitability and productivity.
Operating income : operating income refers to the profit after deducting all the
operating expenses like wages, cost of good sold and depreciation.
The operating income in 2017 was $1,168 which increase to $ 2,077 which shows that
Tesco is able to manage the operating expenses and efficiently achieve the objectives of the
organization.
Net income : Net income represent profit of the Tesco after deducting all the Non -
operating expenses from the operating income like interest and taxes, provision for taxes,
discount etc.
The net income of Tesco in 2017 was negative than it start to control the non operating
expenses of the organization and try to manage them. Tesco get succeed in managing the non

operating expenses. In 2019 the Net income of Tesco is $ 1,322 but still Tesco has to control
their expenses so they can generate the higher income and earn more profit by capturing the
market and increasing their productivity.
Balance sheet : balance sheet is the balance of assets and liabilities of the organization
in a particular accounting year. Generally the accounting year used is from January to
December. On assents side it shows the strength of the organization like building, machinery,
debtors etc. In liability side it shows the debt of the organization like the creditors, long term
and short term borrowing, bills payable etc. Balance sheet represent the balance of assets and
liability of Tesco. The items include in balance sheet are :
Current assets : Those assets which are easily converted in cash within the one year is
known as current assets. Cash, short term investment, securities, cash and cash equivalents are
the some example of current assets.
The current assets of Tesco in 2017 was $15,417 which was decrease to $ 12,668. It
represent that the short term solvency of the organization is decreased.
Total assets : Total assets is the combination of current and non current assets in the
organization. It represent the strength of the organization.
The total assets of Tesco in 2017 was $ 45,853 which increase to $ 49047 in 2019. In
2018 it was decrease to $ 44,862 which means that the profit of the organization is decrease in
2018 bu in later year Tesco able to manage the profit so the asset of the organization increase in
2019.
Current liabilities : current liability is the obligation of repay the amount within the
one year of the debt. The example of current liability are notes payable, accounts payable,
unearned income etc.
The current liability of Tesco in 2017 was $ 19,405 which increase to $ 20,680 in 2019
it means that The debt of the Tesco is increase and it was not able to manage the debt.
Total liability : The total liability of Tesco in 2017 is $ 39,415 which decrease to
$34,189 in 2019 which means that they are able to repay their debt in the market from their
profit.
Cash flow : cash flow of the organization is the comparison of the cash inflow and outflow in a
particular financial year and the difference between them represent the profit of the

organization. Inflow refers to the sources through which an organization generate its income
and the outflow means the uses of the cash.
Net cash flow by operating activities : It is the difference between the operating inflow
and the operating outflow. The operating activities are the core activities of the organization.
In 2017 the net cash flow by operating activities was $1989 which decrease to $1966 in
2019 which means that the uses of operating cash flow is increase and they have to manage the
operating expenses.
Net cash flow by investing activities : Investing activities refers to the usage and
sources of cash from the investing activities. It is the difference between the cash inflow by the
investing activities and the cash outflow by the investing activities.
In 2017 the cash flow by investing activities is $ 279 which decrease to $(1143). it
means that Tesco increase their expenses and more invest in investing activities like property,
plant, machinery, acquisition etc. Tesco has to manage it expenses for the positive cash flow.
The negative cash flow represent the excess use of cash in investing activities.
Net cash flow by financing activities : The cash flow by the financing activities
represent the difference between the usage of cash in financing activities and the sources of
cash from the financing activities. The cash inflow from the financing activities includes the
cash, dividend received, sale of treasury bill etc. and the cash outflow from the financing
activities include the repurchase of share, treasury bill, issue of common stock, long term debt
issued etc.
The net cash flow from financing a
P4. financial ratio for the organizational performance and investment
2017 ratio 2018 ratio 2019 ratio
Gross profit 2,902 0.05 3,350 0.06 4,144 0.06
sales revenue 55,917 57,491 63,911
Net profit -40 0.00 1,206 0.02 1,322 0.02
Sales revenue 55,917 57,491 63,911
Total sharehoder's equity 6,438 0.12 10,480 0.18 14,858 0.23

Sales revenue 55,917 57,491 63,911
2017 ratio 2018 ratio 2019 ratio
Current assets 15,417 0.79 13,726 0.7134837301 12,668 0.61
Current liabilities 19,405 19,238 20,680
Current assets-
inventories 13,116 0.68 11,463 0.5958519597 10,051 0.49
Current liabilities 19,405 19,238 20,680
2017 ratio 2018 ratio 2019 ratio
Cost of goods sold 53,015 22.41 54,141 23.73 59,767 24.49
Average inventories 2365.5 2282 2440
Net sales 55,917 1.25 57,491 1.27 63,911 1.36
Average total assets 44878.5 45357.5 46954.5
Gross profit ratio is the ratio which can be measured by dividing the gross profit by its
net sales. It is the profitability ratio which helps the company to ascertain its percentage of the
gross profit earned on its total sales(Al-Shaer, Salama and Toms, 2017). It is considered to be
the popular tool which helps the company in evaluating the operational performance of the
business.
Interpretation: from the above table it can be computed that gross profit ratio of Tesco
in the year 2017 is .05 and it increase to 0.6 till 2018 which is showing company is increasing
their profit margin and sales which helps them in achieving the organizational goal as it
showing the increasing trend.
This will leads to capturing larger share of the market and also the generation of the strong
brand value.

Net profit ratio is ratio which shows the relationship of the profit after tax to its net
sales of the company(Robertson and Samy, 2015). This is considered to be the profitability
ration of the company.
Interpretation: from the above calculation it can be predicted that net profit of Tesco in
year 2017 is not sufficient and in 2018 and 2018 the company having ratio of .2 which showing
no change in two years that is constant net profit ratio . The profit of the company increase but
it also leads to increase in lead which ultimately decrease the ration between the both and result
in lower net profit ratio,
Return on capital employed- This is the ratio which measures the company; efficiency
of generating the profits from the capital employed by them in the company by comparing the
operating profit to the capital employed
Interpretation: It can be depicted that the return on capital employed showing the
increasing trend that is company';s return on capital they employed is continuously earning
from, 2017 to 20459 that is .12 than .18 and in 2019 it increase to .23 which is showing
increasing shareholders equity and also the increasing sales revenue of the company.
Current ratio : It is the liquidity ratio which measures the ability of the company's
assets to pay off their debts or short term obligations(Baboukardos, 2017). This will leads the
company to understand that how to increase their current assets in order to pay off their short
term dues.
Interpretation: From the above calculation of the ratios current ratio of the company in
contiguously decreasing and showing the decreasing trend. As company's current assets are
decreasing wheres there liabilities are also decreasing but the ratio of current assets is falling
with high ratio comparatively to current liabilities which results in lower ratio of the current
assets that they are showing the lesser capability of current assets to pay off their current
liabilities of the company.
Quick ratio: this is also the liquidity ratio which is the indicator of company;s liquidity
position and helps in ,measuring the company;s ability in meeting its short term obligations.
Interpretation: this ratio is also showing the decreasing trend that is the relationship
between the current assets and the inventories of the company showing the falling trend. As
company's quick ratio falls from 0.68 to 0.49 till 2019.

Inventory turnover ratio: this ratio helps the company in determining that how
effectively and effeciently they can generate the sales from using their inventory and assets.
This can be well manages if the assets of the company are efficiently managed.
Interpretation: from the above ratio computation it can clearly identified that Tesco
inventory turnover ratio is showing increasing trend over the years that is their cost of goods
sols is continuously increasing in comparison with their inventories which is falling. This also
showing the company's efficiency .
Asset turnover ratio nit is the efficiency ratio which helps the company in measuring
their ability to generate the sales by using its assets and also by comparing the net sales with the
total assets of the company in balance sheet(Nallareddy, Pozen and Rajgopal, 2017).
Interpretation: Tesco showing the increasing ratio of the asset turnover which means
that company's net sale is continuously increasing and its total average assets are also tends top
increase which is showing the company's potential and better efficiency to work and to manage
the assets of the company effectively bad efficiently.
LO 3
P 5 Benefits of the International accounting standards and the international Financial reporting
Standards
International Accounting standards are the first international accounting standards
which are issues by the International Accounting Standard committee which was formed in
1973(Maynard, 2017).. These standards are formed in order to make the comparisons of the
business easier all around the world in order to increase the transparency and the trust in the
financial reporting in addition which fostering the global trade and the investment.
This accounting helps in promoting the accountability, reliability, transparency and
efficiency in the financial markets all over the world. This also enhance the investors and other
participants to make the most efficient and effective decisions regarding the investment
opportunities available to them and also the risk associated with it which ultimately result in
improving the capital allocation.
The accounting standards are set for the entire globe by the International accounting
standards(Al-Shaer, Salama and Toms, 2017). They have no governing authority which
enhance them or making them voluntary. This generally considered number of benefits to the

participants. these standards are generally set of the standards which mention that how certain
and specific types of transaction and also other events need to be reflect in the financial
statement of the companies. The standards are created in order of facilitation of the business
across the borders. there are many benefit of the international; accounting standards which are
explained as follows:
It helps in benefiting the investors: As accounting standards and the given format for
the financial statements helps in making international investment decisions easier(Kundu,
2017). Through these standards, investor is able to co pare the financial statements of different
companies across the world so that they can make the most effective and efficient decisions .
Facilitate the multinational companies: These accounting standards helps in
facilitating the multinational companies which are working and operating in multiple
countries(Haslam, 2017). Instead of using the standards of home country in their foreign branch
they can use the intentional standards all across the units in order to eliminate the confusion and
improving the accuracy and also the efficiency pf the system.
International accounting standards also helps in increasing the international trade: as
many companies are seeking for the trade partners in another countries so that they can facilitate
their international trade and with the helps of the international accounting standards they can
achieve a common language of finance and also the u understanding which helps them in
making to run the business effectively(Lewis and Young, 2019).
These standards aim towards the ensuring of the financial centers of world which are
considered to b more interconnected and are capable of using the global financial reporting
framework which facilitates effective and efficient regulation of the financial markets.
International Financial Reporting Standards
These are the standards which are issued by the IFRS foundation and also the
international accounting standard board in order to provide the common global language for the
business so that they can trade effectively and efficiently without any chaos or confusion.
They also focusing on easy understanding and comparison across the international
boundaries for the business. These standards are continuously leads in replacing many different
accounting standards of nations(Venturelli and et.al., 2018). This are generally considered to be
the rule and regulations which are used by the business to maintain the books of accounts
which is capable of comparing, understanding and also they are reliable and relevant for the

internal users and also the external users of the financial reports so that can make the most
effective made efficient decisions which further helps them in achieving their overall goal.
IFRS motive is to develop the consistency in accounting languages , statement and
practices for helping the investors and businesses and making them more educated about the
financial analyses and the decisions(Lawal and et.al., 2018).
They have provided many benefits which includes the improving comparability with the
other companies and more efficiently priced capital. Their goal is providing the framework at
global level for the public companies that how they are preparing and disclosing their financial
statement(Warren, 2015) . These standards are helping the companies in providing the general
guidelines for the preparation of the financial statements instead of setting the rules for the
industry specified reporting.
P 6 Evaluating the models of financial reporting and auditing
The financial reporting model is considered to be the blueprint which leads in setting the
structure and also the content of the financial reports which is generally issued by the local and
state governments(Mohamed Yusof, 2016). The reporting model generally includes the basic
financial statements which is required the supplementary information . An efficient and
effective model is the model which helps the company in ascertaining their future performance
and making direction to guide the activities towards the achievement of the most efficient future
performances in different situation of the organisation.
This is meant to be that must be in order for the financial model. There is the three
statements financial reporting which generally includes the preparation of the income
statement, balance sheet and the cash flow of the given organisation for the particular period of
time(Nallareddy, Pozen and Rajgopal, 2017). More advanced models of financial report tying
are also used by the Tesco which is generally involves valuation, planning and also the
professionals.
There are many models which can be used by companies and the selection of these
models is completely based on their situations and their requirements for presenting the
financial information to their internal and external users which aids them in the decision making
effectively and efficiently. Some of the models which are used by Tesco are as follows;
Three statement model:

This is the model and considered to be the basic setup and requirement for they financial
modeling(Heidrich, Alim and Tiwary, 2017). This model consist of there statements which
includes the income statement, balance sheet and the cash flow of the given organisation are all
linked with each other dynamically .their objective is to setup the accounts which are connected
and they capable of making the assumptions which can derive the organizational changes in the
entire model of the company(Al-Shaer, Salama and Toms, 2017). It is required by the
organisation to understand that how all theses statements are linked with each other and it also
requires the Strong and solid foundation for the auditing and reporting.
Discounted cash flow model:
This model basically is made on the basis of the three statements model in order to value
the company which is based on the net present value of the future cash flow of the business.
Discounted cash flow method considered the cash flow fro the three statements model and
make necessary changes in it inn order to identify the net present value of their future cash flow
and also discounted them to company's weighted average cost of the capital(Lawal and et.al.,
2018) .
Budget Model
This is the model which is used to finance for the professionals in the entire financial
planning and also the analysis that is F&A in need of bringing the budget together for the
coming future years. These model is generally designed which is to be monthly based, quarterly
based and also their main focus is on the income statements .
Forecasting model
This model is also used in the financial planning and analysis so that Tesco can help the
accountant ins forecasting and comparing with the budget models(Roychowdhury, Shroff and
Verdi, 2019). This helps in m estimating the actual performance wit the estimated performance
as estimation is completely based on the future forecast. This leads to make the comparison and
also to take the corrective measures which helps to eliminate the deviations and improving the
performance of the organisation by direction the activities towards the direction of the
organizational goal.
Initial public offering Model:
This is the model which is build by the company and helpful for the use of the investors
for their investment decisions. This model is generally created by the investment bankers and

the development professionals(Venturelli and et.al., 2018). This model focuses on making the
company analysis comparable. This analysis will helps to know the company about how much
investor is ordering and willing to invests in the particular company. IPO valuation basically
includes the IP discount in order to measure the stock trades in the secondary market.
Leveraged buyout model:
This is the model which requires debt schedules and is considered to be the advanced
form of the financial modeling. This leveraged buyout model is said to e the most challenging
and detailed financial model as this model containing many different layers of the financing
and it also required the cash flows.
Hence, Above explained are some of rte models which is used by Tesco according to the
needs and requirement of the organisation to accomplish the goal of presenting the financial
information more appropriately and more efficiently.
LO 4
P 7 Difference and the importance of the financial reporting across all over the world among
different countries
Financial reporting is the standard practices which gives the stakeholders n accurate
depiction of the company's finance(Lewis and Young, 2019). This includes the expenses,
revenue capital , cash floe and profits which leads in providing the financial information to the
company.
Each of the key performance indicator having essential role in the depicting the overall health
of the entire company and its business.
Financial reporting or the financial statements are the statements which helps the
internal and external users of the company in providing the useful financial information in order
to help the users and investor to evaluate the company;s financial performance(Nallareddy,
Pozen and Rajgopal, 2017). This Will helps them in making the decisions which result in most
effective and efficient decision regarding the investment which they have to do in the particular
company. The importance of the financial statement cannot be underestimated for any of the
company.
Tesco is also using their financial Statements in presenting their company;s financial
information and performance so to enhance the investor of different countries to make the
investment in their company for the achievement of their organizational goals and objectives.

Financial reporting focuses on providing the most useful information about the
operational results of the Tesco and also their financial position and the cash flow of the entire
business(Palea, 2018). This is generally used by the readers and users of the financial
statements across the national boundaries in order to make the decisions regarding their
allocation of the resources.
This also focuses on tracking, analyzing and reporting the business income. The
purpose of the financial reports lies in examining the resources usage in the company , cash
flow and also the business performance . This will leads to the achievement of making useful
decisions by the investors and its needs to make the in formed decisions about the knowledge
of managing the business(Tschopp and Huefner, 2015).
Financial reports helps in following ways :
 It helps in presenting the Financial condition of the company
 Reporting about the operating results of the cash flow statements
 It Acts as a statement for the shareholder's equity
 It leads in improvement of the debt management
 It also leads the company in making them identify about the trend which they are
following that is profit or losses since some years(Robertson and Samy, 2015).
 Progress can also be measure with the helps of these reports.
 Financial reporting also gives the idea regarding the financial integrity and also the
creditworthiness of the company to the investors, other businesses and creditors all
across the globe.
Financial reporting is also considered to be the end components of accounting and components
of the fanatical reporting are ;
 The financial statement that is balance sheet, income statement, cash flow statement,
statement of change in shareholder's equity.
 Notes to the financial statements'
 prospectus(Tschopp and Huefner, 2015)
 Annual and quarterly reports
 Management discussion and analysis in case if their is public company.

Hence , it can be concluded that financial reporting involves the disclosing of financial
information to the different stakeholders rewarding the financial performance and also the
financial position of the organisation.
In UK financial reporting standards FRS are effective in UK and replace the existing
financial reporting standards which is being issued by the FRC for the reporting periods which
starts on and after 1 January 2015. The requires the companies with different securities that is
weather debt or equity which is to be traded in regulated market of nay of the member state of
an European union in order to use the international accounting standards while preparing
consolidated financial statements of their individual company(Venturelli and et.al., 2018).
Tesco also operate under the standards of FRS regarding the presentation and preparation of the
financial statements .FRS is also called as new UK GAAP
Australia following the AASB standards which is also known as the Australian
accounting standards which also include the Australia equivalent to the International Financial
reporting standards(Tschopp and Huefner, 2015) . Some of the additional disclosures are
retained and some of the non IFRS complained against the requirement apply for Non profit and
public sector organisation.
CONCLUSION
From the above report it can be concluded that financial reporting plays important role
in the organization for presenting the financial information to the users so that they can make
the efficient decisions regarding the investment decision in the particular company. The
regulatory frameworks in context of the financial reporting are briefly explained in the above
report with their purpose. The report also includes the interpretation of the income statement,
cash flows and balance sheet of the company for better understanding . In addition to this
financial ratios are also covered under the report.
This can also be concluded that there are different accounting standards of the different
countries but the international accounting standards are commonly used buy all the countries
and the International financial reporting standards so that easy and better communication can be
made to the users of the statements and reports.
The various models of financial reporting and auditing leads the understanding
regarding different models which are used by the company in order to achieve the

organizational goal effectively and efficiently . Difference nad importance of the financial
reopening is also being concluded in the above report for better understanding of its objectives
and benefit across the different countries.

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