Shareholders are the owners. They are very interested in seeing if their investment is producing good returns. Their role will be to analyse, and protect their interests.
Directors are appointed by the shareholders to run the company. They are answerable to the shareholders for company performance. Their jobs and future depend on giving shareholders what they want, normally increased wealth, but ethical considerations are increasingly important. Their role is caretaking and maximizing! They will know what the financial statements say before they are published.
Auditors generally have an impassionate relationship with the financial statements. They probably produced them anyway, and would have taken an objective view when doing so. Naturally they would be happy to see their client (the company) succeed, and they would be concerned if they see a decline in profitabilty or sustainability of the company. However, auditors have no responsibility to share in managing the company. This is the sole prerogative of the directors together with their appointed managers. Their interaction with the statements may be one of 'pride of accomplishment'! and may be to hope to be appointed again (or not!) next year!
The main objective of financial statements is to provide relevant and reliable information about the financial performance and position of an entity to a wide range of users to assist them in forming their economic decisions. For example, investors require financial statements to judge the profitability of their investments. Lenders require them to assess the credit worthiness of potential clients. Management requires financial statements to manage the affairs of the company in the interest of shareholders. Government may require financial statements to assess the accuracy of tax returns.
How might changing one of the financial statements affect the other financial statements?
Five elements of financial statements are as follows:AssetsLiabilitiesEquityIncomeExpense
The elements of financial statements are measured in dollar amounts.
Finance are the reason for financial statements. Without financial information, financial statements can't be created. Investors use this information to make decisions about investing in a business.
Directors are responsible for overseeing the preparation and approval of a company's published financial statements to ensure they accurately reflect the company's financial position. They also play a key role in ensuring the statements comply with relevant accounting standards and regulations. Additionally, directors are responsible for reviewing the statements for accuracy and providing assurances to shareholders and other stakeholders regarding the company's financial performance.
Stakeholders of the financial statements are:- Owners:- Shareholders- Management- Suppliers- Customers- Employees- Government- Lenders- Financial institutions (investors)- Society and community
board of directors
They ensure that boards of directors fulfill their financial and fiduciary responsibilities to shareholders.
To improve the company's performance in other to maximize shareholders wealth
Business firms, particularly those with stockholders, must prepare honest and conservative financial statements.
Financial statements are important to investors because they can provide enormous information about a company's revenue, expenses, profitability, debt load, and the ability to meet its short-term and long-term financial obligations. There are three major financial statements.
Company directors have many roles within a company. They arrange board meetings and as well once a year there must be an annual general meeting at which the directors provide full financial and related information to their shareholders on the performance of the company.
to assure the shareholders that the company's accounts gives the true n fair picture of the company's affairs...
To know the profitability of the company. To satisfy the shareholders with their investment in the company. In case of financial sourcing, these statements can be of relevance for the company for instance, banks will need to look at its stand in order to be certain and convinced that their money will be repaid.
Accounting information is presented to internal users in the form of management accounts, budgets, forecasts andÊfinancial statements. External users are communicated accounting information in the form of financial statements. These users are creditors, tax authorities, investors, etc..
The main objective of financial statements is to provide relevant and reliable information about the financial performance and position of an entity to a wide range of users to assist them in forming their economic decisions. For example, investors require financial statements to judge the profitability of their investments. Lenders require them to assess the credit worthiness of potential clients. Management requires financial statements to manage the affairs of the company in the interest of shareholders. Government may require financial statements to assess the accuracy of tax returns.