Corporate financial reporting

Corporate financial reporting MEANING:- The term financial reporting refers to the information communicated through financial statement such as profit and loss account balance sheet and cash flow statement to the end users for decision making. DEFINATION:- The financial reporting may be defined as “communication of published financial statement and related information from a business enterprise to the external users such as shareholders creditors customer government authorities public for decision-making.

Objectives of financial reporting The financial reporting is not an end in itself but is a means to certain objectives. The following are the important objectives of the financial reporting. They are 1) Investment decision making 2) Management accountability. 1) Investment decision making:-The basic objectives of financial reporting is to provide information useful to investors creditors and other users in making sound investment decision.

The financial reporting is also provide a information useful for making economic decision and useful to present and potential investors and creditors and other users in making investment credit and similar decision. Management accountability:- Another important objectives of financial reporting is to provide information on the management accountability to judge management effectiveness in utilizing the resource and running the business enterprise.

Qualitative characteristics of Financial Reporting Information (FASB):- According to frame work for the preparation and presentation of financial statement is issued by institute of chartered accountant of India. The following are the important qualitatives characteristics of financial reporting information. They are:

Financial Reporting Information 1) Relevance 2) Reliability 3) Understability 4) Comparability 5) Materiality 6) Consistency 7) Substance over form 8) Timeliness 9) Pradence

Revenue:- To be usefull information must be relevant information has the quality of relevance when it influences the economic decision of users by helping them to evaluate past present or future event. Realiability:- To be useful information must also be reliable information has the quality of reliability when it is free from materity error and bias . Therefore information should be relevant as well as reliability.

Understandability:- An essebtial quality of the information provided in financial statement is that it must be readily understandable by users. Therefore the information must be understand by the users what it means. Comparability:- Another important quality of information is comparability. The users must be able compare the financial statement of difference enterprises in order to evaluate their relevant financial position performance and cash flow statement.

Materiality:- The relevance of information is affected its materiality information is material if it misstatement is omission or erroneous could influence the economic decision of users take on the basis of the financial information. Consistency:- The accounting policies and practices are consistent from one accounting period to another accounting period. It enable the management to draw the important conclusic regarding the working of the business concern over a long period.

Timeliness:- Conservation:- The conservatism is generally reffered to as a convention that many accountants believe to be appropriate in making accounting decision. Timeliness:- The timeliness means having information available to decision making before it loses it capacity to influence decision. Timeline is an ancillary aspects of the relevance. If information is either not available when it is needed but available when it is not needed