The information that is in the management report is performance, identifies trends, analyses data, aligns performance to overall
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The information that is in the management report is performance, identifies trends, analyses data, aligns performance to overall goals, and helps them make better-informed decisions for the organization. Basically, it helps them to see the company’s worth. Therefore, by these concepts surveys indicate that users differ in their needs for information and that not all companies should report all elements of information. Thus, some contend that companies should report only information that users and preparers agree is needed in particular circumstances (Chapter 24-2). However, according to FASB, the financial statements should be carefully read for information about off-balance-sheet commitments, future financing needs, and the quality of a company’s earnings (Chapters 22 to 24-7). GAAP requires that the general-purpose financial statements include information basis of segmentation.
Reporting is important because it allows businesses to have full knowledge of their financial situation. For example, knowing how well the business is doing, keeping track of transactions, maintaining a budget, assessing the financial situation, and determining the profit of a specific product. Additionally, reporting is a process for companies and investors, to provide key information that shows financial performance. Government and private regulatory institutions also monitor financial reporting to ensure fair trade, compensation, and financial activities. Hence, for information to be relevant, it must be available to decision-makers before it loses its influence on their timeliness of decisions. Interim reporting is an excellent example of this concept. Lastly, an audit report provides useful information to the investor. As a matter of the fact, the first item to be checked is the auditor’s opinion to see whether or not it is a good one. while on the other hand, fraudulent financial reporting usually occurs because of conditions in a company’s internal and external environment (Chapter 24).
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