Essay on Financial System and Auditing

6179 Words Mar 28th, 2011 25 Pages
Table of Contents

Executive Summary……………………………………………………………………….
Introduction to Tesco……………………………………………………………………..
Effectiveness of Accounting System at Tesco …………………………………………..
The main financial statements of Tesco. ………………………………………………... Financial statement……………………………………………………………….. Benefits of the financial statements……………………………………………… Income statement ………………………………………………………………… Benefits of the income statement………………………………………………… Cash Flow statements……………………………………………………………. Benefits of the financial statement……………………………………………….
Accounting concepts………………………………………………………………………
Factors that influence the nature and structure of accounting system………………..

Management control system……………………………………………………………..
Types of
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According to Pizzey,A.(2001) accounting consists of identifying, measuring and communicating business information to facilitate judgments and decision – making. In actual fact two types of accounting can be identified. There are financial accounting and management accounting. Even though these two categories of accounting uses financial data major differences can be seen. Financial accounting uses historical data to make final accounts of the organization. These accounts must be audited to provide true and fair view of the firm’s trading as it is mainly used by the people out side the business organization. Management accounting is a series of techniques used by managers within a firm to help make decision. Managers of the organization use financial data and information for planning and control purposes and that facilitate them develop policies for the future. Management accounting is used internally by managers of the organization.

Interpreting financial statement would be key role of the management accountant. By doing so it can be ensured that the company operates in the right direction. Weakness or adversities are identified at a relatively early stage and appropriate recommendations are made and corrective actions taken timely basis in achieving objectives.

The followings are the financial statements which are specified by the Companies Act 1985 and which make according to the
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