- 1 Why do they need financial information?
- 2 Who needs financial information and why?
- 3 Do board of directors prepare financial statements?
- 4 Why is useful financial information important for business decision makers?
- 5 Why do stakeholders need financial information?
- 6 What are directors required to do when preparing financial statements?
- 7 Who is are responsible for the information in the financial statements?
- 8 What is the role of the Board of Directors in accounting?
- 9 What are the responsibilities of the Board of Directors concerning the audit of the financial statements?
- 10 Do directors keep accounting records?
- 11 What are the roles and responsibilities of the board of directors what is the purpose of internal controls?
- 12 What is the importance of board of directors in an organization?
- 13 What are the three primary functions of a board of directors?
Why do they need financial information?
Financial statements are essential since they provide information about a company’s revenue, expenses, profitability, and debt. Financial ratio analysis involves the evaluation of line items in financial statements to compare the results to previous periods and competitors.
Who needs financial information and why?
1. Owners and investors. Stockholders of corporations need financial information to help them make decisions on what to do with their investments (shares of stock), i.e. hold, sell, or buy more. Prospective investors need information to assess the company’s potential for success and profitability.
Do board of directors prepare financial statements?
A proper understanding of the financial statements and information provided to the directors assists the directors in fulfilling these responsibilities. A board can delegate the work to prepare financial information, but the board as a whole is ultimately responsible for financial reporting.
Why is useful financial information important for business decision makers?
Financial statements have to provide realistic and objective picture of realistic business condition of certain company. … A well-established process of management on the basis of the financial statements and financial in- formation is one of the most significant presumptions of the quality business.
Why do stakeholders need financial information?
Stakeholders of the company require the financial information for following reasons. To know how well the company is doing. To find company has earned more money than they spent. To get an idea about strategic and tactical plans of the management.
What are directors required to do when preparing financial statements?
The preparation of the financial statements requires management to exercise judgement in making account- ing estimates that are reasonable in the cir- cumstances, as well as to select and apply appropriate accounting policies. These judgements are made in the context of the applicable financial reporting framework.
Who is are responsible for the information in the financial statements?
A company’s management has the responsibility for preparing the company’s financial statements and related disclosures. The company’s outside, independent auditor then subjects the financial statements and disclosures to an audit.
What is the role of the Board of Directors in accounting?
They have ultimate responsibility for ensuring that legislative requirements in relation to financial reporting, such as filing with regulator bodies and providing financial information to investors / shareholders, are complied with.
What are the responsibilities of the Board of Directors concerning the audit of the financial statements?
The Board of Directors is responsible for providing oversight of management functions. The board is also responsible for ensuring that management implements and maintains appropriate internal controls needed to prevent misstatements from occurring—whether caused by fraud or error.
Do directors keep accounting records?
Directors are legally required to keep specified registers, books and records that reflect the operation of the business. It is usually the company secretary’s primary responsibility, though it is also the responsibility of the director(s) to ensure they are maintained and kept up to date.
What are the roles and responsibilities of the board of directors what is the purpose of internal controls?
Overview. Among its many roles, a board of directors is responsible for establishing accountability for company management and assuring reasonable internal controls through independent third-party reviews of the company.
What is the importance of board of directors in an organization?
The board’s key purpose “is to ensure the company’s prosperity by collectively directing the company’s affairs, while meeting the appropriate interests of its shareholders and relevant stakeholders”.
What are the three primary functions of a board of directors?
Just as for any corporation, the board of directors of a nonprofit has three primary legal duties known as the “duty of care,” “duty of loyalty,” and “duty of obedience.”