Essay on Corporate Reporting

1960 Words8 Pages
To: Elizabeth Bruce – Line Manager From: Charvin Ebanja – Accountant Date: 7 November 2002 Subject: Introduction and discussion of Directors (Pentium plc) concerns about the use of published financial statements for evaluating the success of a company. You should discuss the purpose of financial statements for various stakeholders. You should also discuss the impact the different accounting policies have on the final published figures. The company we have chosen to focus on is the Selfridges Group plc. In this report we will look at the published financial statements to analyse their financial performance and positioning. We will also focus on the objectives, limitations and users of financial…show more content…
Investors as providers of capital, their principle interest is in assessing the risk inherent in, and return provided by their investment or potential investment. Also the organisations ability to generate cash and its financial adaptability. Government and their agencies main interest lie in the entities allocation of resources, which constitutes looking at all the activities of the organisation. In order to do this they require information to assist them in regulating the activities and assessing the taxation. A lot of their information is acquired through special purpose financial reports as well as the published general-purpose financial statements. Customers require the use of financial statements because they are interested in the companies continued survival. This is especially so if they rely on the company or have a long-standing relationship with the company. Employees are users because they require information in order to assess the stability and profitability of the business. Attention is especially paid to any activity or change that will affect their sector of the business. They are also interested in assessing their employers’ ability to provide remuneration, pensions and any other benefits. Lenders and any other creditors are interested in information that helps them assess whether their debts will be paid in due time. They are also concerned with information that helps them to decide whether or what
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