Financial Accounting Theory - Ball and Brown Study

The research shows that the earnings announcements of firms within an industry can impact the share prices of other firms in the same industry. This effect has been labelled as the ‘information transfer effect’. The ‘information transfer effect’ highlights the belief that share prices react to public information emanating from various sources—including

Financial statements are interrelated. It is so because the financial position of a business changes after each session of good or bad financial performance. Until we measure both financial performance and position, we cannot predict the cash flow position of the business.

A vertical and horizontal analysis of each company's balance sheet and income statement in this particular case will be enlightening. A vertical analysis will for instance shed some light on how revenue is being used. In this case, each component of the companies' financial statements will be converted into a percentage of a key component of either the balance sheet or the income statement. A special common size balance sheet and income statement will be utilized to ease comparison. The

In 2005, the County of Santa Barbara adopted three key values as “guidepost” to direct County employees’ interactions with each other and the public. These three values are Accountability; Customer-Focus; and Efficiency (ACE). The objective of the ACE model is to strengthen the organization’s ability to deliver excellent customer service to the Santa Barbara community. To meet this goal, it requires both policies and the personal commitment by employees at all levels to implement these three values every day.

States. Companies should report income, liability, equity, and assets. Many people (stockholders, investors, etc.) who have a stake in the company want to know this information before providing a service. In this paper, International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) will be compared for

In this paper I will identify the four basic financial statements, discuss how they are interrelated with each other, and why they are useful to managers, investors, creditors, and employees.

The purpose of this assignment is to increase your understanding of the information contained in a firm’s financial statements and of the relationship between the statements. As you study financial accounting, we will focus on using financial information in a meaningful way, to understand the firm’s past performance and project its future performance.

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The form, the use and the people involve with the financial and accounting information in a company is going to be developed in this report.

Financial statements of the company are significant for the investors who would like to venture into the business operation. It gives them the insight whether the business is making profits or it is doomed to fail;

Financial statement measures the financial performance, liquidity and strength of the firm, it is important

Financial statements are a very useful tool for individuals interested in the organization. Investors use the information to determine if it a wise decision to put their money into the organization. Investors need to determine if the organization has been successful and profitable and will continue to be successful and profitable. Creditors use the financial statements to determine the amount of credit that should be advanced to the organization. Employees generally do not look at the financial statements, but if a new executive was thinking of joining the organization, he or she may want to see the potential of the organization to make sure the investors are becoming a part of a successful organization. Management uses the financial statements on a monthly basis to determine which areas of the organization are profitable and which areas of the organization that needs to be discontinued or restructure to become more profitable.

By: Charn Gek Cheng, Chiang Soo Ling, Kummar Sokali Muthu Mogan, Lee Siew Fen Samantha

Preparation of the financial reports used by the external users of the financial information entail going through a given accounting cycle process (Martínez and Lin, 2014 p. 245). It all starts by recording various financial transactions as they take place in the prime books or books of original entry. The data in the books of original entry is therefore posted to the respective ledgers, which therefore after being balanced; the balances carried down are transferred to the trial balance. From the trial balance, the final accounts are drawn. These final accounts include the income statement, statement of the financial position and statement of cash flow among others. All these final financial statements represent different accounting information that communicates the situation of the financial welfare for a given entity in a given period. Thus, it is a requirement that every company discloses its financial information to the public via publication to enable all the interested parties to make an informed decision.

A company prepares financial statement to provide information about its financial position and performance. This information is in turn used by a wide range of stakeholders (such as investors, banks, customers, suppliers etc) in making economic decisions with respect to respective economic interest in the company. Typically, in terms of ownership by investment in shares of the company, shareholders though own the company but do not manage it. Therefore, the shareholder and other such stakeholders to get comfort in taking sound decision need independent assurance from the auditors that the financial statements reflect true and fair view of the company affairs in all material respects. Hence, in order to enhance the level of