Beyond the record creation process, accountants use the information gathered for analysis and interpretation. Accountants are usually concerned with understanding the meaning of the amounts they obtain, and they look for the relationship between business events and financial results.

In this sense, an essential part of this understanding is creating reports, especially for people who can make decisions about companies’ actions without accounting knowledge.

A Financial report is a document that transcribes a personal or group reflection on a defined topic with the intention of favor decision-making. Accounting professionals capture everything observed about the company’s financial situation, structured in an understandable way for senior management, lawyers, banks, and even suppliers.

A Financial report structure includes a header, a summary of the company’s most relevant aspects, the report’s objective, identification of problems, analysis of the causes, recommendations, and conclusions. 

Header. Lists the company’s name and the financial statements with their correspondent period. The report’s title refers to the subject to be discussed, date, and place of the analysis.

Summary. Lists the activities carried out by the company, the commercial and legal characteristics, and its main short-term and long-term objectives. 

Objectives. Lists the purpose and the area of the company that will receive the report. 

Problems. Lists all of the issues that led to the report’s preparation; it is described in detail and summarized; generally, analyzing different indicators.

Causes. Clearly and concisely lists the problems identified in the previous point. It may include graphs to make the information clearer and precise. Financial Statements can be summarized, highlighting the most influential figures in the study carried out. 

Recommendations. Provides a clear and brief description of what the company can do to solve the problems, quick findings of the situation, and suggested course of action to address the issues.

A Financial report should list all the names of the people who worked on the report’s preparation, their respective identification numbers, and their position in the organization. 

Initial research is vital to gather relevant data critical in meeting the company’s needs, maintaining order, breaking down relevant data as evidence, and following parameters to avoid misinterpretation of the report’s data.

Conclusions. Financial reports must include a detailed analysis of the results obtained, compare the figures with the goals, financial projections, percentage of sales, and other ratios that explain each trend’s reason and the increase or decrease of state items. Consequently, a series of reasoning, such as liquidity, indebtedness, and profitability, should be included.

Financial reports must have a specific target audience in mind, either the company staff or the general public. Their objective can be to evaluate company operations, detect weaknesses and strengths, and establish corrective measures, giving shareholders the possibility to decide whether to continue contributing or participating until verification of compliance or not with the taxes generated.

The report presented must comply with specific attributes that distinguish it from any other and contribute to support an adequate image of the company. These attributes are clear, clean, accessible terminology, well written, concrete, and well presented.

Finally, the Financial report’s presentation must be neat and legible, addressed to the intended audience, and include indexes to know the company’s reality. When placing information, it is vital to consider the most relevant evidence and have the professional ethics to carry out the report.

By Andrea Diaz

.

Newsletters

Events & Sponsorship

Talent Kids Event 2017

August 19, 2017 RGB Accounting has proudly sponsored the 2017 Talent Kids event organized by Pecora Events on August 19th. RGB Accounting wants to thank organizers, presenters, judges, and all participants for making this a great event. Here we share some of the...

Los Nocheros USA/Canada Tour 2017

June 02, 2017 Argentina's biggest folkloric phenomenon arrived in Toronto, Canada to celebrate its 30 years trajectory. RGB Accounting was one of the sponsors of the event. More from our blog   Newsletters Events & Sponsorship Articles &...

2nd Latin American Entrepreneur Conference

May 29, 2017 The Entrepreneur Conference was organized by the City of Toronto's Economic Development & Culture department in partnership with the Latin American Bi-Lateral Trade Initiative (LABTI) which consists of the Consulate Generals of Argentina, Brazil,...

Tax Season 2017 at La Liga Indoor Soccer

April 29, 2017 RGB Accounting has been sponsoring social events to promote cultural values in the hispanic community of Toronto and the GTA. The During the last tax season, RGB Accounting helped many individuals and small business owners to prepare their taxes,...

Articles & Publications

Fundamentals for the Analysis of Financial Statements

Financial Statement analysis is carried out through methods, often defined as techniques that allow knowing the entity's transactions on its financial situation and results. Based on the order to follow the analysis, these methods simplify and separate the financial...

The U.S.’s New Law To “Ban” Shell Companies

The new U.S. Corporate Transparency Act (CTA), which passed in late 2020 as part of the National Defense Authorization Act, makes seemingly significant changes to the information required when incorporating a company in the U.S. While the legislation is a significant...

Everything you need to know about your 2020 taxes.

As tax season begins, Canadians are faced with filing for an unprecedented year - job losses, federal financial aid, and working from home are just some of the major adjustments made over 2020. The Canada Revenue Agency (CRA) has listed all the deadlines for the 2020...

ADP Canada National Employment Report

Employment in Canada Decreased by 28,800 Jobs in December 2020   Employment in Canada decreased by 28,800 jobs from November to December according to the December ADP® Canada National Employment Report.  Broadly distributed to the public each month, free of...

Share This