Question

Why do organisations need accurate and timely financial information? What information is required to manage the organisation’s finances? Who is usually responsible for an organisation’s financial management?(in Australian Accounting environment) Discuss in 100 to 120 words.

Answer 1

Q. Why do organisations need accurate and timely financial information?

A. Timely and accurate financial information helps organization to see how they are performing and to identify areas for improvement. It helps in making effective strategic business decisions. It creates credibility and confidence in the eyes of stakeholders (shareholders, lenders, Government, etc.) about the business operations and the management. Thus accurate and timely financial information is critical to the success or failure of a business

Q. What information is required to manage the organisation’s finances?

A. Following information helps to manage organization’s finances –

• Financial reports like balance sheet, profit & loss statement, Cashflow statement
• Budget figures
• Working Capital position and cash positions (payment & collections)
• Ratio analysis dashboard
• Report on Internal controls

Q. Who is usually responsible for an organisation’s financial management?

A. Board of directors is responsible for an organisation’s financial management. Chief Financial Officer is usually charged with the task that proper systems are in place for accounting and financial management.