Purpose of a financial statement audit Companies produce financial statements that provide information about their financial position and performance. IAS 1 sets out the overall requirements for financial statements, including how they should be structured, the minimum requirements for their content and overriding concepts such as going concern, the accrual basis of accounting and the current/non-current distinction. Their purpose is to, based on research, data collection, and data analysis, advise a company’s management on the most financially efficient means of growing the company’s business and profits. The CPA is also required to read the financial statements in light of the financial reporting framework being used and consider whether the financial statements appear appropriate in … This information is used by a wide range of stakeholders (e.g., investors) in making economic decisions. They also prepare for the purpose of helping the user, especially the investors in predicting the entity’s future cash flow. Financial analysts are also financial planners. A financial statement review is a service under which the accountant obtains limited assurance that there are no material modifications that need to be made to an entity's financial statements for them to be in conformity with the applicable financial reporting framework (such as GAAP or IFRS).A review does not require the accountant to obtain an understanding of internal control, or to … ADVERTISEMENTS: Let us make in-depth study of the meaning, nature, objectives, uses and importance of financial statements. Financial Statements That Omit Substantially All the Disclosures Required by the Applicable Financial Reporting Framework .20 When,after discussions with management,the accountant prepares The purpose of financial statements does not only provide the users to know how well or bad the entity financial position is, or how big or small the entity. Broadly we can divide the financial statements in two different types: General Purpose Financial Statements Special Purpose Financial Statements As said earlier that the basic objective of every […] However, there are different kinds of financial statements for different purposes. Each area of a financial statement has a purpose and provides specific information about a company's financial stability. The objective of IAS 1 is to set out the basis for the presentation of financial statements and to ensure comparability with previous periods and with other entities. The notes to financial statements. The Balance Sheet. The basic objective of any financial statement is to fulfill information needs of the intended users. Its purpose is to convey an understanding of some financial aspects of a business firm. Financial statement analysis is a significant business practice because it helps top management review a corporation's balance sheet and income statement to gauge levels of economic standing and profitability.Let us say Mr. A., the chief financial officer (CFO) of a large distribution company, reviews the company's balance sheet and compares short-term assets, such as cash and … The purpose of financial statements is to provide information about financial position, financial performance and cash flows. Balance sheets are based on a fix point called a reporting period—a day, a month, a quarter, a year. The balance sheet's purpose is to show the assets of the company. 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