Explain the purpose of keeping accurate financial records.

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Financial Accounting

E1

Explain the purpose of keeping accurate financial records.

Keep stakeholders informed

Controlling and planning the activities of a business such as SPA Ltd is a critical concept of a business succeeding internally and externally. The financial situation of any business such as SPA Ltd must be monitored and handled effectively, taking considerations of information being accurate and well planned for presentation. Without, SPA Ltd having accurate financial information, the business may not perform effectively internally and externally and may incur problems suffering from financial position and legal status.

There are many purposes of which accurate financial records are kept. One of the main particular records is used to present information to inform the stakeholders of SPA Ltd, which it is legally entitled to present accurate financial position at a certain time. The whole purpose of presenting the current financial status of SPA Ltd to its stakeholders is to inform them of how well the company has progressed through the year.

As SPA Ltd is a large company business, with a large yearly revenue, it has many stakeholders connected to the business internally and externally.

Internal stakeholders

These