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Financial Accounting and Reporting - Essay Example
Author : marksbernard
Finance & Accounting
Pages 10 (2510 words)
ACCOUNTS (Author’s name) (Institutional Affiliation) USERS OF FINANCIAL INFORMATION 1. Investors Investors use financial information to analyze the value of their investment in a company. They want to ensure that returns from their investment is reasonable and profitable before making any further investment (Elliott, 2008)…
4. Customers Customers use financial information to assess the financial position of a company and its ability to supply goods or services stably for a long period. 5. Employees Employees need to know the profitability of their company, its ability to remunerate them in the long term and to ensure their job security (Elliott, 2008). LEGAL REQUIREMENTS ON ACCOUNTS PREPARATION The accounts must be submitted to the tax authorities, corporation tax should be on the basis of the company’s profits. This is done at the end of the financial year. The company’s accounts must be made public by filling them in the house of companies (Horngren, 2002). They must be submitted by the company within nine months after the financial year end. The accounts must be accurate and directors have a legal responsibility of ensuring that the accounts are accurate. The use of an accountant does not reduce the responsibility (Webster, 2004). The financial statements that must be prepared include; balance sheet, profit and loss account, notes to the accounts, director’s report and auditor’s report. The balance sheet must be signed by the director, and a printed name of the director must be included (Horngren, 2002). The accounts should be prepared in conformity of internationally accepted financial reporting standards. ...