Aligning financial reports, Financial Management

Aligning Financial Reports:

The primary purposes of financial systems are to provide information to interested parties.  Any reports produced through the financial management process must therefore align with the particular needs of these parties.

These parties are commonly called 'stakeholders' as they have some interest in the business as either direct owners, creditors with an interest in the financial position of the business, or the users of information under a statutory obligations such as the Australian Tax Office (ATO). 

They can be broken down into Internal and External users.

 Internal Users

  • Business owners
  • Management (department heads)
  • Relevant personnel within the organisation who may have a requirement to comply with certain financial requirements

External Users

  • Statutory entities (ATO, Office of Consumer and Business Affairs, Australia Competition and Consumer Commission, Australian Securities and Investment Commission)
  • Financial Institutions (Banks)
  • Suppliers (who requires evidence of financial performance prior to offering credit)
  • External Investors (if not involved in the day to day running of the organisation)

As the various classes of stakeholders all have differing requirements for information, financial reporting should align closely with those various requirements. 

For example:

A report produced for the purposes of providing information to the ATO will be markedly different than that prepared for the purposes of management evaluation.

Other types of reports may include:

  • Sales reports: settled sales for the particular period, usually required by the principal and head of sales department
  • Sales in progress reports: properties under contract but not yet settled
  • Listing reports: properties listed during the particular period
  • Outstanding deposits: those contracts where purchasers are yet to provide a deposit (placing the sale in jeopardy)
  • New managements (property management): those properties new on the rent roll
  • Lease renewals: renewed leases
  • Rent arrears reports: those properties with rental payments in arrears

In relation to internal parties, it would be prudent to engage the input of all staff to gauge particular requirements.

Similarly, in relation to external stakeholders, outside assistance should be sought to ensure the peculiar requirements of the various statutory bodies/financial institutions are taken into account. This is especially so given such requirements routinely change.

Only once all the requirements are established can the organisation properly develop a financial system which will meet those demands.

Posted Date: 10/1/2012 4:01:30 AM | Location : United States







Related Discussions:- Aligning financial reports, Assignment Help, Ask Question on Aligning financial reports, Get Answer, Expert's Help, Aligning financial reports Discussions

Write discussion on Aligning financial reports
Your posts are moderated
Related Questions
The following treasury issues can be included for the construction of the curve: On-the-run treasury issues. On-the-run treasury issues and sele

How would you explain transaction exposure? How is it different from economic exposure? Answer:Transaction exposure is the sensitivity of comprehend domestic currency values of

State the Analytical procedures at the planning stage Auditors must apply analytical procedures at the planning stage to help in understanding the entity's business, in identi

Q. Security offered -  influence the rate of interest ? The rate of interest charged on the loan will be lesser if the debt is secured against an asset or assets of the company

Partial Income Statement Year Ending 2011 Sales Revenue                $350,000 COGS                            $140,000 Fixed Costs                     $ 43,000 SG&A E

Angel Athletics is trying to determine its optimal capital structure. The company's capital structure consists of debt and common stock. In order to estimate the cost of debt, the

How do risk-averse investors compensate for risk when they take on investment projects? Due to the risk aversion, people demand higher rates of return for taking on higher-risk p

Yanni and Joanna need some investment advice. Joanna has sold $660,000 worth of Woolworths Limited (WOW) shares that she inherited late last financial year. She has $616,000 remain

Can you help me out on the Time value of money????? I need urgent help on this topic...

What are the main implications of ownership rights by equity claims? Ownership rights have two primary implications: a. First, equity holders can advantage by any raise in t