ACCOUNTING FOR MANAGERS

What is Accounting Information?

Accounting is the process of recording, analyzing, summarizing, and interpreting financial
information of a business organization. The Information thus generated is of use to the
stakeholders of the company, namely the employees, shareholders, creditors, banks and other
lenders, regulatory agencies and tax authorities, etc, this information is what is referred to as
Accounting Information .It is the only way or language through which the organization can
communicate with the internal and external world.
What is the Relevance of Accounting Information?
Relevance in accounting means the information we get from the accounting system will help
the end-users to take important decisions. End users can be either internal or external
stakeholders. Therefore relevance in accounting indicates the capacity of influencing the end-
users of the financial statement in their decision-making process.

Who are the Users of Accounting Information?

(1) Owners, (2) Management, (3) Creditors, (4) Regulatory Agencies, (5) Government, (6)
Potential Investors, (7) Employees, and (8) Researchers.

What are the Limitations of Accounting Information?

They are mainly two limitations of accounting of accounting information.

 They are based on Judgements and Interpretations.

 Based on historical cost and hence gets improperly valued.

What are financial Statements?

Financial statements are written records that convey the business activities and the financial
performance of a company. Financial statements are often audited by government agencies,
accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes.

List the Financial Statements in Operation before IFRS.

(1) balance sheets; (2) income statements; (3) cash flow statements; and (4) statements of
shareholders' equity

List the Financial Statements in Compliance with IFRS Regime.

 Income Statement:
The income statement is one of the financial statements of an entity that reports three main
financial information of an entity for a specific period of time. The information includes
revenues, expenses, and profit or loss for the period of time.

 Balance Sheet:
A Balance Sheet is sometimes called the statement of financial position. It shows the
balance of assets, liabilities, and equity at the end of the period of time.

 Statement of Change in Equity:

A statement of change in equity is one of the financial statements that show the shareholder
contribution and movement in equity and equity balance at the end of the accounting period.

 Statement of Cash Flow:

The cash flow statement is one of the financial statements that show the movement (cash
inflow and outflow) of the entity’s cash during the period. This statement helps users
understand how is the cash movement in the entity.

 Noted to Financial Statements:

Note to Financial Statements is the important statement that most people forget about. This
is the mandatory requirement by IFRS that the entity has to disclose all information that
matters to financial statements and help users better understand.
 ASSIGNMENT SUBMITTED BY

PETER ODOSAMASE OSIFO

MASTER OF BUSINESS ADMINISTRATION

(PART TIME)

DEPARTMENT OF BUSINESS ADMINISTRATION

SUBMITTED TO
PROFESSOR F.I.O IZEDONMI