Accounting harmonization
QUESTIONS FOR MID-TERM EXAM
1. All the users of interested parties (users of information) have equal possibility/rights/power to get company’s financial information. Do you agree with this statement (give you arguments)? How financial statements are useful to the various interested parties (users of information)?
Financial accounting’s aim is to allow all the users of interested parties to understand firm’s situations in global and synthetic way. The financial statement produce information for managers as well as for the other users parties (Creditors, Customers, suppliers, employees, stakeholder and even competitors). These different type of users needs different type of information, but they have to satisfy their needs from three documents: Balance sheet, Income statement, and Financial statement. Managers are the most preferred user; they can access to all kind of documents that they required, because they have to make strategic decisions about the development of the firm and they have to forecast the future strategies. Other user have different possibility to reach information, and this depends on the type of users, and on the needs of the firm. For examples, if the firm needs some financing, sometimes banks and investors ask for some additional documents, and it is company’s interest to give them. So users like bank and investors have more power to reach the information that they need. Investors can reach just the Financial statement and all the public available information that the company are required do give.
Also creditors want to know information about the company, to know the likeliwood to be paid if they andvance funds to the enterprise. They are also intrested to know how their funds are being used. Users like creditors suppliers and customers, can find information just in the Financial statements, but it depends on the strength of the users. If the users have big power on the company’s business (only suppliers or customers), can may ask
1. All the users of interested parties (users of information) have equal possibility/rights/power to get company’s financial information. Do you agree with this statement (give you arguments)? How financial statements are useful to the various interested parties (users of information)?
Financial accounting’s aim is to allow all the users of interested parties to understand firm’s situations in global and synthetic way. The financial statement produce information for managers as well as for the other users parties (Creditors, Customers, suppliers, employees, stakeholder and even competitors). These different type of users needs different type of information, but they have to satisfy their needs from three documents: Balance sheet, Income statement, and Financial statement. Managers are the most preferred user; they can access to all kind of documents that they required, because they have to make strategic decisions about the development of the firm and they have to forecast the future strategies. Other user have different possibility to reach information, and this depends on the type of users, and on the needs of the firm. For examples, if the firm needs some financing, sometimes banks and investors ask for some additional documents, and it is company’s interest to give them. So users like bank and investors have more power to reach the information that they need. Investors can reach just the Financial statement and all the public available information that the company are required do give.
Also creditors want to know information about the company, to know the likeliwood to be paid if they andvance funds to the enterprise. They are also intrested to know how their funds are being used. Users like creditors suppliers and customers, can find information just in the Financial statements, but it depends on the strength of the users. If the users have big power on the company’s business (only suppliers or customers), can may ask