The Business Wk 5 Essay

Submitted By ampete
Words: 310
Pages: 2

Any business has a financial responsibility to continue the maintenance of proper financial records. This is imperative for two reasons to maintain a proficient management, and also to acquire and obtain a respectable image needed for outside business investors and creditors. Financial statements is symbolic of the businesses financial situation and is critical for employees, investors, and stakeholders, as well as creditors. Any business is bound to have interests outside the business since it needs external support in to thrive . Again maintaining a proper image on the external environment helps the business to maintain goodwill and to increase investor confidence Inaccurate financial statements discovered by government auditors or other interested parties could therefore lead to deleterious effects on the business . This is because these could be seen as dishonesty or fraud attempts on the part of the business even if the mistakes were not intentional . Financial statements should also aim at showing the business worth in the most accurate manner . The balance sheets , income statements , cash-flow statements , shareholder equity statements and any required supplementary data should therefore be as accurate as possible to eliminate such possibilities . The statements should also be prepared according to the generally accepted accounting standards . This will discuss the importance of accurate statements for the business outside interests while showing the consequences of