FAF3
Syllabus A. The Context And Purpose Of Financial Reporting A1. The Scope and Purpose of, Financial Statements

A1e. Nature, principles and scope of financial reporting 5 / 5

Syllabus A1e)

Understand the nature, principles and scope of financial reporting.

Reporting the results

Financial accounting is mainly a method of reporting the results and financial position of a business. It is not primarily concerned with providing information towards the more efficient running of the business. In fact, financial accounting provides historical (past) information.

Management need to plan for the future. They require detailed information as they are responsible to plan and control the resources of the business.  Management (or cost) accounting analyses data to provide information as a basis for managerial action