What is the importance of final accounts reporting in corporate accounting?

Financial statements are a means of confirming PAST decisions. The numbers tell you a story about the company and what it experienced, how it managed through the positives and negatives and the management philosophy on risk. The past is not always a good indicator of the future, but it helps you understand what a company has done and manage risks and the returns from the macro events happening around them. It's essential to do a study of the accounts to be clear on the changes, and this will allow you to develop predictions going forward. Remember that what was done in the past will not necessarily be good for the future.

Final Accounts consists of: 1) Balance sheet- position of Assets and liabilities as on year end date 2) Income statement- Profit or loss earned and financial performance of the company during Financial year 3) Cash flow statement- Cash flows from operating, investing and Financing activities 4) Statement of changes in Equity:- 5)Notes to Accounts and explanatory notes- Accounting policy, Related party, Actuarial disclosures and others required by regulatory framework

Accounting documents are essential tools for partners in decision-making, through them they evaluate what has been done and, based on the information, project future results, monitor results through comparative periods and direct your business in the best direction.

Final accounts offer a thorough and precise summary of a business's financial status and performance over a given time frame, typically a year. For several stakeholders, this transparency is crucial.

Final Accounts are extremely important as they're means for Companies to communicate their stewardship of performance to all relevant Stakeholders including Government, Shareholders, customers.

Final accounts are very important to keep tracking certain accounts for forecasting purposes (ex: sales revenue, OPEX, Cash and Banks, etc.). It also serves as a basis to analyse company performances. Accounting reports consist of the balance sheet, income statement, cashflow statement, and the changes of equity statements.

Users of Financial statements are: 1. Investors- for making investments based on financial performance 2.Government- For taxes collection, statutory compliances 3.Lenders, creditors - For decisions of disbursement of loans, business transaction 4. Board of directors - For strategic decision making, decision regarding dividends, Divestments

You start by cleaning the General ledgers, then prepare various accounts before preparing the Statement of Financial Position, Equity, income statement, and cash flow statement.

Major challenges in Financial Reporting: 1. Lack of reliable & Accurate data: There are reliability & data credibility issues in Accounting software. Most Accounting software do not provide adequate and sufficient data which undermines the quality of financial reporting. 2.Lack of comparability: Different accounting regulations, Different accounting policies and basis of critical accounting judgements causes comparability issues. 3.Scope of misstaments: Financial statements can be easily manipulated by biased accounting policies such as understatement of expenses, revenue recognition before service completion, Fraud, misstaments. Use of unreliable financial statements erodes investor confidence. 4. Meeting stakeholders expectations

When preparing financial statements, in addition to a good ERP for information security, internal controls are important so that the origin of the data has a history, validation procedures, among other tools used by the area.