in general, financial reports cannot focus on servicing a single group of users. There is the so-called conflict of interest between the user groups, such as suppliers and lenders vs shareholders.Suppliers and lenders require conservative approach in the reports which will reduce thhe shareholdes forecasts of profitability.Senior management vs Employess. Senior management worries that large profit will increase the wage demand, so they ensure that reports show only a small percentage of the total income.
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The purpose of Statements of Financial Accounting Concepts is to : A establish GAAP.
Projected financial statements are estimated financial statements before starting of any operating activity for planning purpose.
To consider the applicability of its standards to the separately issued general-purpose financial statements of governmentally owned special entities.
The purpose of an audit is to add credibility to the financial statements of a business organization.To give credence to the accounting records, accounting polices and financial statements of an audit client.
If I remember this correctly these are Statement of Cash Flows Income Statement Statement of Retained Earnings Balance Sheet
General Purpose Financial Statements are those which includes (a)profit and loss account-which helps in indicating profit or loss incurred during financial year (b)cash/fund flow-helps in knowing the transfer of funds and cash in an accounting year however these are not prepared by all entities (c)balance sheet-helps in knowing the position of assets and liabilities (d)notes to accounts-helps in disclosures of accounting policies
General purpose financial reports are a common set of reports issued by most companies. Special purpose financial reports are specific reports related to individual events.
IFRS and IAS in the Philippines are implemented and adopted in order to prepare the general purpose financial statements. To comply with every IFRS, it grants limited exemptions from the general requirement.
The purpose of accounting is provide information to the users like investors ,financial institutions and to other clients. The four basic financial statements are balance sheet,income statement,cash flow,statement of retained earning.
Financial accountants produce financial statements based on generally accepted accounting principles of a respective country. In particular cases financial statements must be prepared according to the International Financial Reporting Standards.Financial accounting serves the following purposes:producing general purpose financial statementsproducing information used by the management of a business entity for decision making, planning and performance evaluationProducing financial statements for meeting regulatory requirements.
The results of the accounting process are the 5 core financial sections: Balance sheet Income statement Statement of changes in equity Statement of cash flows Notes to the financial statements.