Financial Statements Used By Decision Makers - 1559 Words

Introduction This essay will begin to look at the main financial statements used by decision makers in businesses today. This essay will go into detail about the income statement and statement of financial position and whether these two statements provide decision makers with their financial information adequately. This essay will also include the various advantages and disadvantages of each financial statement as well as describing whom the decision makers are and why financial statements are important to them. A conclusion will be present at the end of this essay to demonstrate an overall view of whether financial statements are beneficial to decision makers. Financial accounting is a crucial process for any successful business. Atrill and McLaney, 2013 define financial accounting as: â€Å"the identification, measurement and communication of accounting information for external users (those users other than the managers of the business).† Financial Statements It is importan t for every business to carry out financial statement analysis in order to gain an understanding of their current financial status. There are two main types of financial statements that businesses commonly use when it comes to financial analysis. These are known as the Profit and Loss Account and the Statement of Financial Position. A profit and loss account consists of a list of expenses incurred by the company, against their revenues over a certain period of time. It shows whether the organisationShow MoreRelatedInternational Accounting Standard Board ( Iasb )1454 Words   |  6 PagesInternational Accounting Standard Board (IASB) is a professional body that develops and approves International Financial Reporting Standards (IFRSs). The IASB is known as an independent and a private sector organizational. IASB was formed to replace the International Accounting Standard Committee. The IASB organization is responsible for all technical matters of the IFRS Foundation that includes â⠂¬Ëœfull discretion in developing and pursuing its technical agenda, subject to certain consultation requirementsRead MoreApplication For Making An Organization Context1719 Words   |  7 Pagesappropriate formats for decision making in an organization context 3.1 Demonstrate collected data and information through various graphs using any statistical software e.g. spreadsheet Using spreadsheet, decision makers record their information in rows and column so that data can be presented in graph using MS excel. For quick review of information and easy understanding, business organization uses spreadsheet line. Now, spreadsheet line, pie chart, bar chart will be used to analyze information.Read MoreWhy Are Accurate Financial Statements Important for Outside Business Interests1432 Words   |  6 PagesWhy are accurate financial statements important for outside business interests? Matt ACC 205: Principles of Accounting I Professor Kaplan Ashford University December 22, 2011 Accounting is specifically â€Å"a system by which economic information is identified, recorded, summarized and reported for the use of decision makers†; however, accounting involves interpretation and analyzing of all financial information, including taxing, personal financial information and investment (AlbaRead MoreQualitative Characteristics of Accounting Information846 Words   |  4 Pagesprovided in financial statements useful to users. The four principal qualitative characteristics are understandability, relevance, reliability and comparability. 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Comparing and Contrasting Auditing, Attestation, and Assurance Services Auditing is the term used to describe the process of obtaining objective evidence regarding the reliability and integrity of financial information or statements (Elliott Pallais, 1997).  Ã‚  It includes procedures such as testing systems and gathering evidence.  Ã‚  Inquiry is another important procedure in addition to analytical tests of records