In addition, the objective of the financial statement user is to find and interpret this data in order to have answers for questions regarding the organisation such as: Would an investment generate returns, or what is the degree of risk inherent in the investment (M. Fraser, Ormiston 1998). Additionally, an organisation’s financial conditions are the main concern to investors and creditors. Investors are simply the capital providers and they rely on an organisation’s financial conditions for both the safety and profitability of their investments. Moreover, investors must to know where their money was spent and where it is now. The financial statement of balance sheet reports that kind of issues by providing detailed information about an organisation’s asset investments.
Accounting is the dominating science here, as it studies collection and transmission of financial information. Basic steps of accounting information system are: information identification, its recording, data analysis and information reporting. Depending on the objective of analysis appropriate methods and techniques should be selected. There are several primary objectives in my analysis of Gazprom’s performance. They are: identification of financial position, revelation of the changes in the financial status for certain time periods and discovering of the main grounds for these changes.
The objectives of the financial analysis: Financial analysis aims to study the calendar established study liquidity and profitability and indebtedness and stability in the facility. Financial ratios: Financial ratios used in financial analysis to extract or derive a relationship between the two figures is attributed to each other. These ratios help identify established to develop the subject of analysis. Financial ratios are one tools and techniques of financial analysis in the processing and analysis. The concept represents a comprehensive package of control methods and tools is the classic tools and methods and effective tools which are methods that can detect deviations phenomenon and is represented by the methods of control over performance.
1 Qualitative characteristics of accounting information Form the figure 1. Above has showed the processes of characteristic in fundamental qualitative that are described following by the section. - Relevance: This is the information that relating to make the financial statement of user decision differencing from the opponents. Predictive value is part of relevant information to help users evaluating the potential effect of past, present or future transaction event on the future cash flows. In addition to, the confirmatory value is helping them to confirm or revise their previous evaluations.
In the framework based on decision-usefulness, the main objective of financial reporting is to prepare useful information for economic decisions. Reliable and relevant information, provided that it is cost-benefit, would be desirable. This approach is focused on users of financial reports with emphasis on investors and creditors and their decisions, informational requirements, and ability for analysis and application of information. In the conventional conceptual frameworks of financial reporting that are often based on the approach of decision-usefulness, measurement system is merely monetary and the basis of valuation is the historical cost. Disclosure in this approach leads to financial position reporting, financial performance, and financial flexibility.
Oval: Financial Reporting Oval: Management Accounting Oval: Financial Management Financial Accounting deals with the measurements and reports of the financial position of the organisation and providies this to external users such as the shareholders, creditors, government agencies, etc. 2. " Finacial Accounting is the art of recording, classifying and summarising in a significant anner and in terms of money,... ... middle of paper ... ...ctual performance with budgeted performance is called budgetary control. This is a crucial activity because every organisation has to evaluate whether the activities and operations are going in the right direction for achieving the organisational objectives. The actual performance has to be compared with the budgeted performance on the basis of actual level of activity.
Disclosures are another part in the financial statements, and are required by the Financial Accounting Standards Board. The purpose of the disclosure is to explain recognized items and provided relevant measures of items that are not measured on the financial statement as well as describing unrecognized items and provides a useful measurement for those items. What the disclosure does is provide d information to help the investor as... ... middle of paper ... ...erivative Instruments and Hedging Activities: an amendment of FASB statement No 133/ Level of authority: GAAP Level A: Miller GAAP Update Service 8.1. Retrieved from http://search.proquest.com.prx-keiser.lirn.net/docview/192391994/14335C8D2B118D6AB7A/1?accountid=35796 Warfield, T; Gribble, J; Lang, M; Lee, C. (1996) Response to the FASB Exposure Draft, “Proposed Statement of Financial Accounting Standards-Consolidated Financial Statements: Policy and Procedures:” Accounting Horizons 10.3 182-185. Retrieved from http://search.proquest.com.prx-keiser.lirn.net/docview/208901068/14335C45C80F4E580F/1?accountid=35796 Wilson, A.; Jones, J.
The information provided in the financial statements under the financial accounting system is used by auditors to analyze the businesses financial position. Maintaining an accounting standard for report for external users is al... ... middle of paper ... ...nancial information and how to analyze the information reported. While each type of accounting is necessary, they are aimed at different audiences and have various standards that are necessary to adequately evaluate the financial position of the company. Financial accounting is primarily the function of putting financial statements together in accordance to GAAP so that the information can be viewed and analyzed for external users, including auditors and shareholders. Managerial accounting is the process of compiling financial statements that will aid the management team in making decisions for the organization.
The auditors should inquire about any evidence of restrictions on the availability of funds and make sure those restrictions are properly disclosed. In addition, the auditors should compare financial statement presentation with the applicable accounting standards. These procedures provide evidence to the presentation and disclosure assertion.
Historical Accounting Versus Fair Value Accounting A company’s financial statements offer numerous types financial information that stockholders and creditors use to determine a company’s economic wealth. Financial statements also deliver past performance results along with future financial abilities. The information obtainable in a financial report is governed by laws and/or by accounting standard practices. Accounting information should be consistent to a degree and should be confirmable as well as good faith reporting. Trustworthiness is inevitability for companies or businesses that have experienced financial officers to evaluate the truthfulness of the company’s financial information.