You have been asked to join a team in your company which is looking at the kind of information it should supply on the company's activities.
Extracts from this essay...
Assignment Question You have been asked to join a team in your company which is looking at the kind of information it should supply on the company's activities. 1. What would you include in an annual report? 2. What would you include in an executive summary? 3. What would you include in a report specifically prepared for environmentalist? Note: Mark would be awarded for: i) Style of presentation, ii) Examples from other companies, iii) Evidence of original thinking. Annual Report Annual report is a book prepared by the corporate of providing the every single corporate performance throughout the whole accounting year, to the shareholders. The corporate performance comprises a great variety of aspects, not only the financial statement but also some important parts in the report as well, where they hold some very significant information. However, the financial statement plays the most vital role in determining the performance of the corporate, which most of the financial users are concerned with. As to whether the corporate is or will encounter any barriers in their future, either they can hinder the growth of the corporate; or having great potential of prospect in the future, which enable the corporate to achieve globalisation or profit maximisation, are hinted through annual report. This indicates that the annual report is capable of providing financial information to the financial users to make economic decision. According to MASB 1, the objective of general purpose of financial statements is to provide information about the financial position, performance and cash flows of an enterprise that is useful to wide range of users in making economic decision. Financial statements also show the results of management's stewardship of the resources entrusted to it. According to S132 (1) of the Company Act, the director is a person appointed by the shareholders in which the director acts on behalf of the shareholders to manage the company. And this is the duty of the directors to report every single information with the greatest extent of transparency and avoid any abuse of authorities and power by the top management.
For instance, in an income statement, the summary of financial statement is suggested to disclose these titles and figures without further computation work, such as: [see Appendix for example] * Turnover, * Cost of Sales, * Gross Profit, * Operating Profit, * Profits Before Taxation, * Taxation, * Profit Attributable to Shareholders * EPS Once the summary of financial statement existed, it is ideal to disclose a report on the trend of the financial performance of the company. The trend should comprise a number of years so as to enable inter-period comparison. The description of trend is not sufficient enough for the users to make accurate economic decision; it should follow by the sources of such changes in trend. By knowing the reason for such changes in the trend, we can compare as to whether the company is improving from its weaknesses, or achieving a more splendid financial performance from the availability of market opportunity. If there is improvement, it means that the management team of the company has the ability to manage the company well, and vice versa. Besides, an executive summary can include a Report of Question and Answer (Q&A) Session during the AGM, on what the stakeholder told the company and what the company committed to. The agenda for the AGM should be disclosed, especially the part of Q&A session, so that all the shareholders can understand how the company react to their questions to meet the peak satisfactory of the shareholders. Apart from that, Scenario Analysis should be implemented in the executive summary as it broadens the perspective to look at how a number of assumptions might change in response to a particular PEST event. The first step in a scenario analysis is to identify a few carefully chosen scenarios that might possibly take place in the company. For instance, the loss of major customer, successful introduction of a major new product, entry of an important new competitor, amendment of new legislation, war and etc.
Once registered, a company will have to comply with certain on-going obligations involving disclosure and audit. 6) Eco-labelling. Developed in Germany, this voluntary scheme will indicate those EC products, which meet the highest environmental standards, probably as a result of an EQM system. It is suggested that eco-audit must come before an eco-label can be given. 7) BS 7750 Environmental Management System. BS 7750 also ties in with eco-audits and eco-labelling and with the quality BSI standard BS 5750. Achieving BS7750 is likely to be a first step in the eco-audit process. 8) Supplier audits, to ensure that goods and services bought in by an organisation meet the standards applied by that organisation. As a conclusion, environmental reporting is continuing to expand and evolve. Whilst current best practice is relatively easy to identify - and an increasing minority of companies can be seen to be operating at this level - some important issues remain. Probably the most important of these are ensuring the widespread practice of environmental reporting - a virtual impossibility in the absence of regulation; developing standards for the completeness of environmental disclosures; establishing best practice in attestation of the reports; and looking forward to the more demanding challenges of reporting about sustainability. One thing seems certain, however, environmental reporting is no passing trend. It is here to stay. Therefore, such proposals could be introduced almost immediately, would force experiment, encourage research and, most importantly, begin the process of moving the external accounting and reporting process into a more environmentally caring role. The only questions are what form it will eventually take and how its adoption by all organisations will be achieved? APPENDIX The Valdez Principles We adopt, support and will implement the principles of: 1) Protection of the biosphere 2) Sustainable use of natural resources 3) Reduction and disposal of waste 4) Wise use of energy 5) Risk reduction 6) Marketing of safe products and services 7) Damage compensation 8) Disclosure 9) Environmental directors and managers 10) Assessment and annual audit Intermediate Financial Accounting III Page 1 of 34 Higher Diploma in Accounting & Finance FTMS - School of Business
Found what you're looking for?
- Start learning 29% faster today
- Over 150,000 essays available
- Just £6.99 a month
- Over 180,000 student essays
- Every subject and level covered
- Thousands of essays marked by teachers