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Accounting In Sit Essay

4659 words - 19 pages

Table of Contents

1.0 Introduction 3
2.0 The major components of Sugar Investment Trust (SIT) annual report: 3
3.0 The Five potential users 5
4.0 How useful are companies’ annual reports in addressing the needs of users of accounts? 6
5.0 Company’s Corporate Social Responsibility (CSR) 8
6.0 To what extent does the regulatory framework govern the preparation of an Annual Report? 9
7.0 To what extent reported profit figures can mislead users of accounts? 10
8.0 Cash flow statements 11
9.0 Accounting Ratios and Cash Flow Statement Analysis 11
10. Cash Flow Statement Analysis 14
11. Criticism of traditional financial accounting and problems encountered in inter-firm ...view middle of the document...

According to the Law, a company must prepare and disclose an annual report.

2.0 The major components of Sugar Investment Trust (SIT) annual report:

1. Chairman’s report
2. Chief Executive Office’s report
3. Mission statement
4. Corporate Governance report
5. Auditor’s report
6. Statement of financial position
7. Statement of comprehensive income
8. Statement of changes in equity
9. Statement of cash flows
10. Notes to the financial statements

2.1 Chairman’s report
The Chairman’s report is an annual meeting report for the year ended of the company’s actual status. The Chairman reports about performance, profit, finance cost and dividends to its customers, shareholders and others. During 2010, SIT has achieved better performance and ended the year with a profit after tax figure of Rs 309.4 million compared to 243.9 million in 2009. The company has also decreased its financial cost from Rs 24.7 million in 2009 to Rs 13 million in 2010 and the board has declared a dividend payment of 10%.
2.2 Corporate Governance Report
Corporate governance comprises the long-term management and oversight of the company in accordance with the principles of responsibility and transparency. The Board is responsible for overall guidance on the strategy, business plans and related affairs of the Corporation.
2.3 Auditor’s report
This report is made to the shareholders in accordance with section 205 of Companies Act 2001.
* Report on financial statements
This includes statement of financial position, statement of changes in equity, statement of cash flows and so on.
* Director’s responsibility for the financial statements
Directors are responsible to prepare financial statements in accordance with the International Financial Reporting Standards (IFRS) and the requirements of Companies Act 2001. Their responsibility includes: designing, implementing and show a true and fair presentation of the financial statements.
2.4 Statement of financial position
This refers to a written report which describes the financial position of a company. This statement provides information to the users about assets, liabilities, equity, gains and losses as well as contributions by and distributions to owners.
2.5 Statement of comprehensive income
This statement shows the company’s sales, profit and expenses. It indicates how revenue is transformed into net income. It also displays the revenues recognised for a specific period and the cost and expenses charged against these revenues. The purpose of the income statement is to show managers and investors whether the company made or lost money during the period.

2.6 Statement of cash flows
Cash flow statement is prepared under the IAS 7 standard. It may provide considerable information about what is really happening in a business beyond that contained in either the income statement or the balance sheet. The cash flow statement identifies the sources of cash inflows,...

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