Financial reporting services essentially involve disclosing the financial facts about the organization and the financial situation to various stakeholders. The various stakeholders about financial reporting usually include the creditors, debtors, public, and insurance agencies. Most of these agencies are responsible for maintaining the financial reports in compliance with the laws that govern them. Thus these agencies collect, organize, communicate and make available financial reports to all interested parties.
The accounting service provided by most of these agencies is indispensable. Financial accounting involves the preparation of financial reports that disclose information regarding business operations and performance. Financial accounting services can be outsourced or can be carried out in-house. The accounting process takes place between the management and the other stakeholders.
The importance of financial reporting services is evident in the present-day business environment. With fast-developing technology, quick and accurate results have become necessary for the success of any business. Companies need to understand their internal and external needs before making a decision. The need for financial reporting services is thus a requirement for the modern company. This makes it possible for organizations to come up with informed decisions to achieve success.
Many financial reporting services make use of cost-effective outsourcing procedures that help reduce the overall expenditure involved. The best part is that these services are highly cost-effective. Cost-effective in this context means that the agencies that provide these services bring down the expenses and provide affordable services. Some of the common, cost-effective outsourced services include the following:
The first and foremost aspect that financial reporting services offer is decision-making support. They enable the organizations to make informed decisions. These decisions help in achieving success at a faster rate. A few of the decision-making tools provided by the companies include the following: Custom reports, Accounts receivable, Accounts payables and invoices, Cash flows and related measures, Sales forecast, and business process modeling. These are just a few of them.
Another very important aspect is the statutory auditing services that enable the organizations to prepare and maintain their reports in line with the requirements of the regulatory bodies like the Securities and Exchange Commission (SEC). It is also necessary to keep the record of audited accounts and the opinion of statutory auditors. There are also other agencies like the GAAP or the Government Accounting Standards that help ensure that the firms’ financial reports comply with the required norms and guidelines. The statutory auditors are chosen from among the following groups:
One more important aspect is the external audit support that provides a third-party opinion regarding compliance with the accounting principles and guidelines. This group typically consists of Certified Public Accountants, Examination Accounting Specialists, Internal auditors, and outside attorneys. They provide their professional opinions to the management through their written reports or as oral advice. All three main types of financial reporting services are meant for the benefit of the investors and help understand the company’s financial condition. They have been created to increase the reliability of the financial reports prepared by the concerned companies. Hence, they have been regulated to prevent abuse of the privilege given to the public.
For instance, there are three major types of financial reporting services: the first is the Regular financial reports which give an account of the performance of the business entity in a previous year; the second one is the Interpreting notes Report on Interpreting notes, and the third one is the Review of financial reports. The Interpreting notes report on interpreting notes refers to the notes about the previous financial year, and the accountant prepares it to provide an opinion on the business entity’s performance in the previous year. The Review of financial reports refers to the Review conducted by the accountant or the internal auditing team. It includes the assessment of the effectiveness and reliability of the financial reports prepared by the concerned company. It is mandatory to include the recommendation of any member of the audit committee when the company is undergoing any kind of financial Review.
Financial Reporting Services Definition The key element of financial reporting is its preparation of financial reports. The shareholders use these for the purpose mentioned above. HR Billing Services help the organizations to raise funds both at the domestic as well as foreign level. The role of Financial Reporting Services is also very much related tothe insurance sector. Since many insurance products are based on financial reporting and therefore need accurate financial reports prepared by highly qualified professionals, it becomes necessary for an organization to hire services to prepare accurate financial reports.
Income Statement and Balance Sheet Both these documents are the most important part of the financial statements and help assess an individual’s fiscal performance. Generally, when we discuss financial statements and how they are prepared, we come across two terms, ‘income statement’ and ‘balance sheet.’ Income statement provides information regarding the income produced by the business for the last one year and balance sheet provides information regarding cash flows and transactions. While discussing these documents, let us discuss a little bit about the income statement and balance sheet first.
An income statement is used to know the net income produced by the firm during a particular month or quarter. On the other hand, it is divided into the Income and Savings section and the Capital section. The difference between these two sections is that all the cash flows from the operations in the current month are counted for the income section. For the capital section, only the value of capital assets owned is counted in it. This analysis report also discusses the liability and equity issues arising out of the firm’s operations in a particular month.