By Peter Atrill
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Extra info for Accounting: An Introduction, 4th Edition
5 Do you think that accounting reports should be understandable to those who have not studied accounting? It would be useful if anyone could understand accounting reports, but realistically this is not likely to be the case. Complex financial events and transactions cannot always be reported easily. It is probably best that we regard accounting reports in the same way as we regard a report written in a foreign language. To understand either of these, we need to have had some preparation. Generally speaking, accounting reports assume that the user not only has a reasonable knowledge of business and accounting but is also prepared to invest some time in studying the reports.
Nowadays, management accounting systems will usually provide for managers information that is relevant to their needs rather than what is determined by external reporting requirements. Financial reporting cycles, however, retain some influence over management accounting and managers are aware of expectations of external users (see reference 1 at the end of the chapter). qxd 7/08/2007 11:20 Page 15 HAS ACCOUNTING BECOME TOO INTERESTING? Scope of this book This book covers both financial accounting and management accounting topics.
To meet the changing needs of users there has been a radical review of the kind of information to be reported. The changing business environment has given added impetus to the search for a clear framework and principles upon which to base financial accounting reports. Various attempts have been made to clarify the purpose of financial accounting reports and to provide a more solid foundation for the development of accounting rules. The frameworks and principles that have been developed try to address fundamental questions such as: ● ● ● Who are the users of financial accounting information?
Accounting: An Introduction, 4th Edition by Peter Atrill