Financial accounting has its focus on the financial statements which are distributed to stockholders, lenders, financial analysts, and others outside of the company. Members of the FASAC are chosen from a cross-section of the FASB’s stakeholders, including users, preparers, practitioners, association members, academics, and other parties interested in the integrity of full and complete financial reporting and disclosure. The specialized field that handles accounting for business is called financial accounting & provides individuals who are externally linked to that business with knowledge on a companyÂ´s financial performance & position. These standards are important for financial accounting statements because so lots of people use these statements in so lots of different ways.
Financial accounting statements can be used to evaluate management effectiveness by showing the spending of allotted resources & helping to evaluate whether management ought to be sent to work in another department or replaced altogether to increase the profitability of the company. The FASB, or Financial Accounting Standards Board, is responsible for making a standardized method of rules called accounting standards for financial accounting in the United States.
I am a Professional with a high creative capability based on Business, Management, Financial Accounting, Management Accounting, Finance, Management Consulting and Computer programming background. Owner, directors, managers, officers are the most highlighted examples of internal users of accounting information. Managerial accounting identifies, measures, analyzes and communicates the financial information needed by management to plan, control, and evaluates a company’s operations for the internal users.
Financial accounting is the process for preparation of financial reports of the enterprise for use by both internal and external parties. Creditors or lenders uses the accounting information to find out the ability of the borrower to repay the loan, the amount of assets and liabilities of the borrower, evidence of income, economic position etc. Before investing, an investor sees the financial report for figuring out the possibilities of the business in future.
Associate trading companies looks at the financial information and makes the decision to trade with the particular economic entity. The financial information is vital for government regulatory agencies as it allows them to monitor the economy and market. The accounting information provides information that is necessary for making changes of the existing laws at the right moment for the economy and society betterment. Anybody out side of the managing radius of an economic entity is interested to the financial information of it, is defined as external user. Therefore, communication of information is the essential function of accounting.