Question

Who should complete financial reports? Department heads versus centralized positions? Give examples of strengths and weaknesses of the differing roles completing the reports?

Answer 1

As we know that financial reports of any organization are the main reports which give whole financial idea about an organization. All stakeholders of the organization need complete and full idea from the given financial reports hence it is desirable & necessary that such financial reports must be prepared by centralized positions.

Although internal financial reports are prepared by departmental heads but these reports are not much helpful for the external users that is why it is also true that some internal financial reports are prepared by the departmental heads but main financial reports are prepared by the centralized heads.

If main financial reports are prepared by the departmental heads then these reports will not depict full & complete financial image about the organization for all stakeholders that is this is major limitation for such departmental financial reports but such departmental financial reports have some benefits such as; It will help in better internal management of the oragnization, It will helps in improving internal financial reporting within an organization, It will help in maximizing overall financial health of the oragnization.

But in case when financial reports are prepared by centralized positions then it will help in better communication between organization and external stakeholders, it will help in providing full & complete financial information to the government bodies. Such financial information will be more reliable & significant for the external & internal users as well.