Accounting and Financial Reporting
Say the word “accounting” and a vision of tons of financial transactions springs to mind. Accounting & financial reporting is the lifeblood for any business. Why not, after all, they show you a glimpse of where your business stands financially and take the steam out of the stressful tax season.
All the financial transactions performed over an accounting period are presented in the form of financial statements that further narrow down to a financial report showcasing the overall performance of the organisation. Typically viewed as companies issuing financial statements, financial reporting is the way of communicating the financial information or results of an organization to the concerned people, including stakeholders and creditors. Financial reports are generally used to compare companies that are similar in nature or belong to the same industry.
Overall, the basic purpose of accounting and financial reporting is to provide a summary of an organisation’s operations, financial position, and cash flows which is further used by the management to make big small corporate decisions. UAE follows International Financial Reporting Standards (IFRS) and the IFRS for SMEs Standard. The UAE Commercial Companies Law No 2 of 2015, which came into force on 1 July 2015, mandates all companies to apply international accounting standards and practices when preparing their accounts.
Accounting & Financial Reporting: Significance
Financial reporting is the all-inclusive account of all the business transactions, including expenses and income details. Generated either quarterly or annually, financial reports communicate the financial position of an organisation over a specific period. Prepared to study resource usage, cash flow, business performance and the financial health of the business, financial reports intend to track, analyse and report business income. Business owners and managers have to keep the historical data (presented in the form of financial statements) in front of them for future planning and budgeting. They also need to check the correlation between profitability and cash generated from operations. Not only that but, businesses also need to present the company’s financial status to its investors, creditors, clients, suppliers, and government agencies. In the light of these facts, it’s paramount that the accounting and financial reporting is accomplished by the experts in the field only who not only is capable of presenting the true and fair picture of the business’s financial standing but also of ensuring the financial statements comply with IFRS.
Financial Reporting: Objectives
Keeping track of business is crucial for any firm to move ahead. Management has to understand its firm’s financial position after a certain period. Usually, after one year, a business stabilises and requires forecasting. And that’s where the financial reports come and assist the management in organisational planning and decision-making. It not only shows a clear picture of the financial position but also directs towards future decision-making. It shows the accounts of the last date is the financial year-end, and with the help of the balance sheet, it shows the balances for future business investments. Revealing information about a company’s revenue, expenses, profitability, and debt, financial statements are essential for an organisation. Let’s take a look at some of the objectives behind the preparation of financial reports below. Financial reports provide the required information:
On the credit and investment decisions made by the company.
For assessing the cash flow (securities, income earning, profit and loss decisions for lenders)
Regarding economic resources that include shareholder claims, claims made by creditors and offer clarity to other financial claims, etc.
About the financial results, profit & loss information or expenses made during certain periods
On the liquidity and solvency of the firm with details on how the firm gets the funds required for running the business and how it utilises the funds received. It also explains the lenders about the ways of investing money in the business.
Financial Reporting: Objectives
Aimed to help management in predicting future requirements, financial reports are equipped to provide companies with oversight of their financial dealing. Below-mentioned is the list of mainstays of financial reporting:
External financial statements (income statement, statement of comprehensive income, balance sheet, statement of cash flows and statement of stockholders’ equity)
Notes to the financial statements
Public documentation pertaining to quarterly earnings and related information
Quarterly and annual reports to stockholders
Financial information posted on a company’s website
Quarterly and annual financial reports to government agencies
Documentation regarding the distribution of common stock and other securities
Knowing the financial condition of an organisation is important for both its owners as well as investors. Apart from stakeholders, other external entities such as customers, creditors, government authorities may also be interested in this report to analyse the current financial standing of the company so they can make further decisions with that organisation. It is the controller’s job to prepare this report. Keeping both internal use and external parties in view, a financial report is compiled in two forms:
Accounting and Financial Reporting Services in UAE
While financial accounting is a branch of accounting that keeps tabs on a company’s financial transactions, a financial report or financial statement is a management tool utilised to convey key financial information to both internal and external stakeholders by covering every aspect of financial affairs with the help of specific KPIs. Unlike bookkeeping that can be done by an accountant, financial reporting should be performed by expert finance professionals only. We won’t mince matters – your company might be in dire straits if your accounting & financial reporting isn’t done by due care.
Preparation of a financial report is certainly a daunting task for many businesses but not for us. We, at Adam Global (AG), have a specialised team that have a penchant for solving all your accounting and financial reporting problems. You may count on our accounts & finance specialists in UAE for your monthly, quarterly and annual financial statements. Not only that we can also assist you with financial performance review including ageing analysis of inventory, receivables, payables, and ratio analysis to gauge and evaluate business performance. Apart from financial accounting & financial reporting services, you may also make the most of our years of experience in bookkeeping, concurrent accounting and year-end accounting. Worth their salt, our experienced and qualified accountants in UAE are happy to assist you with:
- Chart of accounts preparation
- Ledger setting
- Financial statements (monthly, quarterly, annually)
- Budgeting & Variance Analysis
- Cash Flow Management
- Bespoke reports creation to address different issues
- Financial Analysis
- Financial statements generation for audit purpose
- Auditors (coordination)
Contact us for free consultancy and to know how Adam Global can help you prepare various accounting and financial reports.
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