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
1.  Find out the present value of Rs. 10,000 to be required after 4 years if the interest rate is 6%. 2.  A Firm can invest Rs. 10,000 in a project with a life of three years.

Q. What is Disadvantages of IRR Method ? Disadvantages of IRR Method:- (i) Computation of IRR involves tedious calculations. (ii) Occasionally this method produces more t

Describe the balance of payments identity and discuss its implications under the fixed and flexible exchange rate regimes. Answer:  The balance of payments recognize holds that t


How does a preemptive right protect the interests of existing stockholders? A preventive right protects the interests of existing stockholders by giving them the opportunity to

Significant Performance Indicators   Following are the most commonly used performance indicators used to assess the financial, and general health of any company:   Gro

Central Bank : The Central Bank is the nation's principal monetary authority responsible for the monetary policy of the country. It regulates money supply and credit, issues cur

Preferred Stock This is a category of capital stock that will gives its holders preference  over common stockholders in the distribution  of earnings  or rights to the assets o

Analytical procedures of auditors Auditors must apply analytical procedures at the planning and overall review stage of audit. Analytical procedures include the considerati

Corporate Governance features Corporate compliance: The BOD should make sure that corporation obeys with all related laws, governance practices, regulations, accounting an