Accounting reports & accountabilit

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Accounting reports & accountabilit

  1. 1. “ ACCOUNTING REPORTS AND ACCOUNTABILTY”
  2. 2. SAJID GHAFOOR.DOC “ ACCOUNTING REPORTS  AND   ACCOUNTABILTY” INDIVIDUAL PAPER PRESENTED BY SAJID GHAFOR
  3. 3. Such financial information is used by managers, lenders, investors, tax authorities, regulators, and other decision makers to make resource allocation. Accounting is the art of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management. ACCOUNTING - INTRODUCTION :
  4. 4. The American Institute of Certified Public Accountants (AICPA) "The art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof.” ACCOUNTING - INTRODUCTION :
  5. 5. <ul><ul><ul><li>Recording, </li></ul></ul></ul><ul><ul><ul><li>Verifying, and </li></ul></ul></ul><ul><ul><ul><li>Reporting </li></ul></ul></ul>Assets,   Liabilities,   Income, and   Expenses <ul><ul><ul><li>Accounting involves the process of recording, verifying, and reporting of the value of Assets, Liabilities, Income, and Expenses in the books of account (ledger) to which debit and credit entries (recognizing transactions) are chronologically posted to record changes in value </li></ul></ul></ul>PROCESS OF ACCOUNTING
  6. 6. Financial Accounting involving the collection, recording and extraction of financial information, and the summary of it in the form of a periodic profit and loss account, a balance sheet and a cash flow statement in accordance with legal, professional, and capital market requirements. Management accounting performed within an organization to provide information only accessible to its decision-makers that will allow them to be better equipped in their management and control functions. TYPES OF ACCOUNTING
  7. 7. <ul><li>There is little contrast to financial accounting information, management accounting information is: </li></ul><ul><li>designed and intended for use by managers within the organization, whereas financial accounting information is designed for use by shareholders and creditors. </li></ul><ul><li>usually confidential and used by management, instead of publicly reported; </li></ul><ul><li>forward-looking, instead of historical; </li></ul><ul><li>computed by reference to the needs of managers, often using management information systems, instead of by reference to financial accounting standards. </li></ul>Financial accounting information
  8. 8. <ul><li>Strategic Management —Advancing the role of the management accountant as a strategic partner in the organization. </li></ul><ul><li>Performance Management —Developing the practice of business decision-making and managing the performance of the organization. </li></ul><ul><li>Risk Management —Contributing to frameworks and practices for identifying, measuring, managing and reporting risks to the achievement of the objectives of the organization. </li></ul>The American Institute of Certified Public Accountants (AICPA) states that management accounting as practice extends to the following three areas:
  9. 9. <ul><li>Income </li></ul><ul><li>Statement </li></ul><ul><li>Balance </li></ul><ul><li>Sheet </li></ul><ul><li>Statement of </li></ul><ul><li>cash flows </li></ul><ul><li>Statement of </li></ul><ul><li>retained </li></ul><ul><li>earnings </li></ul>Financial Statements
  10. 10. Income Statement Balance Sheet referred to as statement of financial position or condition, reports on a company's assets, liabilities, and Ownership equity as of a given point in time . Statement of cash flows Statement of retained earnings Financial statements
  11. 11. Balance Sheet Income Statement referred to as Profit and Loss statement, reports on a company's income, expenses and profits over a period of time. Profit & Loss account provide information on the operation of the enterprise. Statement of cash flows Statement of retained earnings Financial statements
  12. 12. Balance Sheet Statement of retained earnings : explains the changes in a company's retained earnings over the reporting period. Income Statement Statement of cash flows Financial statements
  13. 13. Balance Sheet Statement of cash flows : Statement of cash flows reports on a company's cash flow activities; particularly it’s operating, investing and financing activities. Income Statement Statement of retained earnings Financial statements
  14. 14. ASSETS Current Assets Cash and cash equivalents Accounts receivable (debtors) Inventories Prepaid Expenses Investments held for trading Other current assets Fixed Assets (Non-Current Assets) Property, plant and equipment Less : Accumulated Depreciation Goodwill Other intangible fixed assets Investments in associates Deferred tax assets LIABILITIES and EQUITY Creditors: (Current Liabilities) Accounts payable Current income tax liabilities Current portion of bank loans payable Short-term provisions Other current liabilities Creditors: (Long-Term Liabilities) Bank loans Issued debt securities Deferred tax liability Provisions Equity Share Capital Capital reserves Revaluation reserves Retained earnings Sample balance sheet structure Balance Sheet of XYZ, Ltd. as of 31 December 2009
  15. 15. THANK GOD

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