Assignment Financial Accounting and Reporting Essay

Assignment Financial Accounting and Reporting - Essay Example The creditors assess the ability of a company to repay their loan. Hence, ratios pertaining to leverage and cash flows are essential for the company’s creditors and bondholders. Existing and potential Shareholders: Existing shareholders need the financial accounts to assess the long term viability of their investment whereas potential shareholders also require financial information to decide the future prospects of the company (Porter & Norton, 2012). This aids in deciding whether the investor should invest in the company or not. Shareholders generally look at the company’s ratios such as return on equity, dividend yield and price to earnings ratio to assess whether to invest or to not invest in company. Governmental Agencies: Tax collection agencies are interested in a company’s financial accounts to ascertain the tax that a corporation must pay to the government. Securities and Exchange Commission (SEC) prescribes the manner in which financial statements are pr esented and hence effectively is a user of company’s financial accounts (Sofat & Hiro, 2006). Stock brokers and financial analysts: Financial analysts use a company’s financial counts to prepare financial reports advising their clients to invest in a particular stock. Supplier: Suppliers of a company also use financial accounts to assess whether the company would be able to honour its payments. Suppliers look at a company’s accounts payable and if the accounts payable are very high, it indicates that the company’s creditworthiness is low. Suppliers are also concerned with liquidity ratios such as current ratio and acid test ratio to ascertain a company’s ability to meet short term commitments. 2. Financial Accounts are prepared by a company itself and the information presented in the financial accounts is only available with the internal sources of a company. Hence a company can twist the factual information to present a glossy picture of the compa ny in order to entice investors to invest in the company. This is why the role of auditors and regulators is very important in the presentation of financial accounts. Regulations safeguard the interests of external user of financial accounts so that the information presented by the company is free of any bias and errors. The regulations require that the companies present the financial information accurately on an annual basis and the statements should be duly audited by an external auditor. Moreover, the financial accounts should give a true and fair picture of the company and the company should not attempt to misrepresent any information. Moreover, the requirements differ if a company is a sole proprietorship, partnership or a public limited company. A company also needs to adopt accounting standards based on the location it operates in. International Accounting Standards Board (IASB) is an independent standard setting body of IFRS (International Financial Reporting Standards) foun dation (IFRS, 2013). A company has to claim compliance with IFRS and present its account on the basis to IFRS. This helps in comparing the financial statements of various companies across an industry and helps in deciding whether the company’s performance has improved or worsened compared t the overall industry’s performance. On the other hand, FASB (Financial Accounting Standards Board) also establish accounting standards in the United States and the companies operating in the US have to

Critical Analysis of Primary Sources Essay Example | Topics and Well Written Essays - 1000 words

Critical Analysis of Primary Sources - Essay Example The High Imperial Commissioner is almost envious of the fact that, England is always on the verge of development from its history to present. Major arguments of Zexu’s letter to the Queen of England However, the High Imperial Commissioner is not happy with the fact that, it is through trade that opium has penetrated to China, and affected a great percentage of its populace. In fact, Zexu (pp.3) complains that England is much more concerned with profits and not the harm that results from the sale of such harmful products. Worse still, the emperor did not stop at considering the woes by the Chancellor but was quick to brush him away. The High Imperial Commissioner of China complains that his country has dedicated a lot of energy to alienating use of opium in their country. In the letter to the Queen, Zexu (pp.4) complains that it is not fair that the country prohibits opium use in their country but is of interest to sell the same drug to other countries, China inclusive of them. The fact that England is well conversant with the harms of opium makes it extremely difficult for the Chancellor to comprehend. In his argument, it would be interpreted that the Chancellor would want England to reciprocate the efforts made by China to export useful goods to humankind. All the exports have been indicated to be of use to the country, unlike what England has been exporting. This, Zexu (pp.4), quotes to be inclusive of agricultural produce, Chinaware, amongst others. The fact that, England uses the imports from China to make as much as possible, results to the Chancellor’s need to ban their exports to England, as well as ban the markets for sale of Opium in the country. From an analysis of the major arguments portrayed by the Chancellor of China, it is valid to argue that that British government is out to manipulate other purposes of benefit to their own country in terms of acquisition of profits from ‘unfair’ commerce. Opium war is yet to undergo n umerous processes prior to complete abolition since it is only cultivated in suburbs that not only need to survive, but are not concerned with how much impact opium has on human life (Zexu, pp.5). The queen must take to her concern the ban on opium through complete uprooting these plants in all areas that are seen to flourish the business. Palmerston’s letter to the Chinese Ministers- Major arguments In his dispatch, British State Secretary of Foreign Affairs, Palmerston (pp.7) aims at responding to the China’s emperor complains on the pains inflicted on China by Britain. In the message, he aims at portraying the idea that the British government has already made a move to react on the case by sending a troop to apologize on behalf of the disturbing comments made by some of the British officials in the course of duty in the area. This move can arguably been indicated to improve the relations between China and Britain. This majored on the need by the British government t o maintain the good relationship that the two countries have enjoyed for a long period of time. The Chinese government had no issues on the Britons living in the country, but it dawned on the Chinese government that the Britons were taking advantage of the good will by the Chinese, through taking part in trade, and then shift the profits to its own country. With no treaty