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Answer only one part from all of the questions below:

Question 1

1. Discuss the concept of corporate reporting, its importance and the characteristics of good corporate reporting. Also, explain the concept of integrated reporting.

Question 2:

1. Critically discuss financial reporting and analysis. And explain the following:

* The GAAP ( Generally Accepted Accounting Principles)
* The IFRS ( International Financial Reporting Standards)

Answer 1

1.Corporate reporting may be defined as the presentation and disclosure of various reporting aspects of an entity.

With the growth and expansion of trade and commerce, there is a continuous increase in number of organisations and compettion amongst them. There is a need for stakeholders to be aware of the health of the organizations by means of various types of financial data.Corporate reporting is a process by which companies convey their financial and other important data to the users.As per American Accounting Association the financial reporting is the movement of information from the private domain (i.e. inside information) into the public domain. To promote uniformity and for the sake of easier comparibility, financial reports needs to be standardized. For the purpose they need to prepared based on certain guidelines, standards, principles that are developed and accepted by various accounting bodies such as Accounting Standard Board(ASB), Institute of Chartered Accountants of India(ICAI), International Accounting Standards Board (IASB),etc.

Importance & Charactereristic of Good Corporate Reporting:

The Institute of Chartered Accountants of India(ICAI) issued a framework for preparation of financial statements in July 2000. The following objectives were given in the framework-

• Fundamental objective of corporate reporting is to provide information about the financial position, performance and cash flows of a concern which can be widespreadly used for economic decision making by a wide range of users.
• The common needs of most of the users are catered by the financial statements. However they do not provide all the information that is required in economic decision making.This is because financial statements generally have financial information for a concern.Non -financial information may or may not be present.
• Assessment of management's accountability and stewardship qualities can be seen as the result of the performance of the company. The owners or investors of the company may decide to invest or sell or change managerial personnel based on the reports prepared.

There are certain qualitative factors for good corporate reporting. This are-

• Understandability- Reports should be easy to understand by the users. It should aim at communicating complex matters clearly .Reasonable assumptions may have to be made about the users’ level of understanding.
• Timeliness-A financial statement shows the financial data of a company at a given point of time. Uniformity should be maintained in selecting time periods. In general terms, latest up to date information is more useful.
• Comparability- Financial reports should be standardized and be prepared by following general guidelines, standards by governing accounting bodies.It helps in comparison amongst similar items and entities in an industry which in turn helps in understanding performance and growth. Comparative information from previous years is often an aid to understanding trends.
• Completeness-Reports should contain all relevant information and free from ambiguity.Complete reports provides the base for comparability.
• Reliability- Financial statements should be neutral and error -free. Judicious estimates should be used to provide unbiased opinion.
• Relevance and Materiality- Reports should contain relevant information.Materiality is a measure of relevance specific to the reporting entity. Information would be ‘material’ if its omission or misstatement would influence the decisions that users make on the basis of that report.

Integrated Reporting is a concise communication about how an organization's strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term. The primary purpose is to explain providers of financial capital about the creation of value over time.Benefits of integrated reporting are as follows-

• Greater understanding of value creation.
• Improvement in what is measured.
• Improvement management information and decision making.
• Newer approach to stakeholders relation
• Connecting departments and broadening perspectives.