01. Management and Financial Accounting Flashcards
What is the definition of an Internal User?
An internal user is someone within the organisation who uses information to manage the business.
What are three examples of Internal Users?
- CFO/CEO
- Management
- Employees
What is the definition of an External User?
An external user is someone outside the organisation who uses the information to make decisions about the business.
What are three examples of External Users?
- auditors
- shareholders/investors
- ATO/government
What is the purpose of Internal Reporting?
To provide financial information to assist internal users with decision making.
What is the purpose of External Reporting?
To provide financial information to assist external users with decision making.
What decisions do Internal Reports assist with?
- Business goals and objectives
- Controlling day to day efficiency
What decisions do External Reports assist with?
- Financial stability
- Financial performance
- Financial position
What regulation is required for Internal Reporting?
No regulation - just needs to meet the needs of the business
What regulation is required for External Reporting?
Rules & regulations such as:
- corporation act (2001)
- Australian Accounting Standards
- ASX listing rules
- ASIC regulations
What are some examples of Internal Reports?
- master budget
- cash budget
- budget income statement
- performance reports
- capital investment
- CVP
- cost accounting
What are some examples of External Reports?
General Purpose Financial Reports (GPFR):
- balance sheet
- income statement
- cash flow
- statement of changes in equity
- comprehensive income statement
Are internal reports Future Focussed or Historic Focussed?
Future Focussed
Are external reports Future Focussed or Historic Focussed?
Historic Focussed
What is the usual Time Period of Internal Reports?
No specific period
