FINANCIAL INFORMATION

Financial Information - The Needs of Internal Stakeholders

Management, Control and Accountability for Financial Resources

Table of Contents

Introduction3

Literature Review3

Limitations in the use of financial statements5

Discussion6

Production Manager's Needs6

Marketing Manager Needs7

Financial Manager Needs9

Chief Executive Officers' Needs11

Shareholders' Needs13

Conclusion14

Financial Information

Introduction

Financial information is information produced by the accounting necessary for the administration and business development and therefore is processed and concentrated for use by management and those working in the company. The need for this information makes the occurrence of the financial statements. The financial information has become an integrated set of financial statements and notes, to express what the financial condition, results of information lies in the fact that it needs to be presented to users used to formulate conclusions on the financial performance of the entity. Through this and other evidence the general user can evaluate the future of the business and make economic decisions on it (Chemmanur 2009, 1045-1079).

Literature Review

The essential feature of the financial statements will contain the information to reach a judgment. This must be characterized as being impartial and objective, so as not to influence the reader to a certain point of view responding to the characteristics of reliability and truthfulness. Within the context of generally accepted accounting principles the basic financial statements are historical events that occurred and report are part of the framework for the general user can weigh the future.

Looney (2011) concluded that accounting reports were useful to small businesses in the agricultural sector. In terms of specific uses of accounting reports, Beaver and Jennings (1997) stated that profitability measures, cash-flow, and ratio analysis information can be extracted from accounting reports and these were effective for success. Hodge (2010, 101-1) also found that 11% of businesses used financial statements information in their managerial evaluation and two percent performed financial ratio analysis.

The balance sheet entails information regarding assets, liabilities and stockholders' equity at a given period. The income statement shows revenues, costs and expenses and resulting profit or loss in the period. The statement of changes in stockholders' equity entails changes in the investment of owners for a particular period. The statement of changes in financial position indicates how resources were modified and obligations of the company during the period. The notes to the financial statements are an integral part thereof and aim to complement the states with relevant information (Fischer 2010, 374-399).

Wholey (1979, 89-96) argues that duly analyzed and interpreted financial information is the basis of all good decisions and that financial executive must make decisions on the basis of adequate and timely information. A company has financial information on historical facts and future elements are related accordingly. To find these relationships, it is necessary to perform an auscultation of the information which consists of applying a range of techniques and procedures of mathematical type. Following the analysis, personal judgments must be applied along with the practical experience to give a diagnosis on the financial position, results and projections of the company, similar to that done by a physician to interpret the clinical analysis of his ...