Altfragen Klausur Theorie Flashcards
What is financial reporting?
- Relevant financial info provided
- in a structured manner
- to inform a certain addressee
- about the development of the business of an entity or a group of entities.
What is the difference between external and internal reporting?
- Internal vs. external reporting (e.g. Management vs. tax authorities/government).
External report: compare actual & previous year
Internal report: compare actual & budget you’ve planned
Löschen
Why do we need financial reporting?
Generally:
- need for information which has to be provided and then used (decision making, planning etc.).
Legally:
- § 22 GmbHG & § 81 AktG bu and components are very clearly defined and specifically described)
What is the objective of financial statements?
- provide Information about the financial position/performance/changes of a company that
- is useful to a wide range of users in making economic decision
What are generally accepted accounting principles? (GAAP)
= GAAP is a standard framework of guidelines and rules concerning the recording/summarizing/preparation of financial statements
- There are 2 different systems of GAAP –> UBG and IFRS.
Why do we need rules like the GAAP? (4)
What are the rules of UGB/IFRS? (5x each)
We need rules like the GAAP for:
- comparability of financial statments
- transparency and disclosure
- investor protection
- regulatory compliance
UGB:
- accurate picture of the BS, P&L, CF
- only realizrd profits are showm
- prudence principle
- protection of creditors
- basis for calculating dividends
IFRS:
- financial statements should become comparable/understandable/reliable/relevant as per users on international level
- Valuation system is based on fair Value
- Information provided for investors
- Decision Usefulness
- used for consolidated financial statements
What kind of internal reporting do you know? (5)
Monthly Reports
– for the management
ad hoc Reports
– deep dive analysis in addition to the monthly
report not regularly
Liquidity Reports
– shows the current cash position
Investment/Project Reports
– status of investment
H&R Reports
– overview about the development of the FTE numbers
Is there a link between internal and external reporting?
Yes, there should be. Reconciliation (Übereinstimmung) of external and internal results advised, double checking!
What are critical prerequisites (Voraussetzungen) for the internal reporting? (3)
- Organization
- Controlling
- Bookeeping
- Operative departments (production, sales, management) - IT Systems
- High quantity of data has to be handled
- Completeness of Data - Processes
- Monthly closing process needs to be defined (responsibilites)
How can financial controlling be defined?
-Preparation and Analysis of financial information to provide the management with valid data for decisions.
What does the job despriction look like of a Data Controller vs. Busiess Controller?
Data controller:
= backbone of controlling organization
- is not specialized on specific companies, operates on group level
_ supports all controlling processes
- provides data and ensures its quality
- uses IT-tools
vs.
Business controller:
= sparring partner to the management
- is responsible for one/more specific companies
- responsible for processes like: closing/budgeting/reporting/analysis
- applies group-wide guidelines
- provides financial know-how as support
What do you understand under “monthly closing”?
- Preparing accurate monthly results in order to analyse deviations and draw conclusions from the information.
- Preparing of info: Accruals, classification of revenues & expenses, collect & analyse data and then create a report.
Why do we need this instrument? (monthly closing) (4)
- To get financial info to different levels of management
- to combine financial/non-financial information to show the cause and effect chain
- to see which part of the group needs attention from the management
- to support decisions and initiate measures
- Dpt. Managers will get a detailed report;
- members of the supervisory board will get the big picture showed with more graphs.
Are there any legal requirements for monthly reporting?
- not directly for monthly reporting
BUT:
- quartely reporting to the supervisory board
- having an internal control system
What are the general rules for the creation of reports?
- Clear reporting structure
- executive summary, short overview of KPIs,
- then product group view
- contributions margins and
- more detailed commentary.
The less detailed the report is, the more graphs and less figures should be used and vice versa),
- relevant data
- clear messages
How should a report be presented?
Relevant data!
- Starting from the bottom EBIT/EBT,
- then go up to the revenue,
- then operative result/gross margin and
- at last talk about material changes of expenses etc.
-Split into segments (IFRS 8 obligatory & § 250 UGB = option).
- Tables should give a certain information
- graphs should be simple and support in transporting a message
- commentary should contain solutions and/or measures (no misleading assumptions!)
Are there differences between the reporting to different addressees?
- Yes, in both detail and use of graphs/figures.
-The higher level of management, the less use of detailed figures!
Löschen
What are specific challenges in the case of project/investment, liquidity and H&R reports?
Project/investment:
- monthly status updates advised (act. Vs. budget comparison),
liquidity report:
- WC,
- cash reserve,
- long/short term financing, -
- available credit lines
H&R report:
- number. of FTEs etc., KPIs (sales/employee, travel exp./employee etc.),
- measure of employee satisfaction
On which 3 topics current research concentrates on? What does it mean?
Business intelligence:
- provide and deliver information
Behaviour accounting:
- how human behavior influences accounting decisions
Robotic accounting and artifical inteligence:
- self learning machines deal with the correct posting of business transactions
Describe the Information Process (5)
- Need
- Provide
- Create
- Launch
- Use
- Information
What do we need for a financial statement?
UGB: Balance sheet, P&L, Notes, Management report
IFRS: Balance sheet, P&L, Notes, Cash Flow, other comprehensive income, changes in equity, Notes to the financial statements
Umsatzkostenverfahren: Cost of sales -> HK, VW, VT
Gesamtkostenverfahren: Total cost of accounting -> BVÄ -> Aufgliederung der Kosten nach Aufwandsarten
What are the 2 forms of controlling organisation called?
Centralized Controlling
Local Controlling
What are the advantages/disadvantages of controlling organisations?
(Name 2x Vorteile +2 Nachteile each)
Centralized Controlling:
(+) Controlling is part of the group holding,
(+) Controlling Team is more flexible due to more staff
(+) Continual knowledge transfer
(+ Standardization of reports and controlling tools
(+) independat/neutral statements (no influence from local management)
(-) No controlling department in the local companys
Local Controlling:
(+) Local experts (independant from group controlling)
(+) direct report, to local management
(+) individual reporting solutions
(-) high influence of the local management, therefore no objective statements
(-) no standardized process for knowledge transfer
General rules of reporting / How to set up the executive summary?
Clear reporting- Which financial information is available, what can be reported
Relevant data- Filter the most important information for the management
Clear messages- Every figure and every graphs must have an interpretations
What is project monitoring? What steps are included and whats the benefit from it?
Definition:
= planned set of interrelated task to be executed over a fixed period and within certain cost and other limitations.
Steps:
- Project plan
- organisation (responsibility)
- description of the project (milestones) - Quarterly or monthly report
- status of the progress
Benefit of a project report:
- clear statement of the current project progress
