An understanding of the conceptual bases of the corporate financial reporting system and the preparation of financial statements are essential prerequisites for a good accountant or a financial analyst. Financial reporting is the communication of financial information of an enterprise to the external world. Corporate financial reporting is a series of activities that allows companies to record operating data and report accurate accounting statements at the end of each month, quarter and year. Bookkeepers record operating data by debiting and crediting financial accounts. Accountants prepare financial statements in accordance with corporate policies, industry practice and regulatory guidelines. Within a corporate context, financial reporting covers set of accounting data which include;
A corporate balance sheet also known as a statement of financial condition or statement of financial position. It provides information about a company’s assets, liabilities and equity capital. Assets are economic resources that a company owns. Liabilities are debts and organization must repay. Equity capital represents funds that financial market participants invest in a company. Balance sheet is an important part of financial reporting system.
Income Statement & Cash Flow Statement
An income statement is an important measure of an organizations economic health. The investors, financial analysts and corporate business partners are relying on this to judge the company’s performance. It provides data on a firm’s expenses and revenues, indicating whether the firm is profitable or not.
A cash flow statement indicates liquidity movements within a company’s operations. In other words, the report tells the tale of the company’s cash payments and receipts over a period of time. The statement indicates cash flows from operating activities, investing activities and financing activities.
Corporate financial reporting is an important function because it enables organizations to present accurate accounting statements. The objective of corporate financial statement is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions. The consultants at Emirates Chartered Accountants Group Dubai assist the clients to maintain a perfect financial reporting system in the organization which will contribute to the success of the organization. For more information contact us firstname.lastname@example.org