FINANCIAL ANALYSIS AND MANAGEMENT

Financial Analysis and Management



Table of Contents

Introduction2

Use of Accounting as an information system2

Purposeful activities in a business3

Concept of Management and Financial Accounting4

Managerial accounting4

Financial Accounting5

Information processing in accounting5

Usage of Information System based on accounting6

Accounting information system advantages6

Who use the accounting information?7

Scientific study of Accounting9

The GAAP concept9

Basic Accounting Principles10

Discretion11

Complete Disclosure11

Separate Legal Entity11

Sequence12

Continuity12

Accrual and the related income and expenses12

Substance over form prevalence13

Actual Cost (Historical)13

The Accounting as information system and its limitations13

Conclusion14

References16

Financial Analysis and Management

Introduction

The report covers the accounting qualitative aspect by keeping in view the main aspect which it satisfies i.e. perform the function of information management pool for the company. Few questions are also answered in the report few of them are like information system characteristic, the business financial management value, limitation of accounting in regards to information system and ultimately the importance of accounting concepts and principles. Thus, in this report we are going to look into the all the above aspects in detail and in accordance to the relevant principle and policies at Glaxo Smith Kline.

Use of Accounting as an information system 

The focus of the modern accounting is more on the end need of accounting information, which are used inside or outside the organization for the decision making. The information system, which processes, measures and transfer financial info, is use of accounting as an information system in the company. The economic entity, industrial entity and the commercial entity of the private or the public sector is called an Enterprise. As per the committee of International accounting standard board, which brings in accounting professional; bodies of 85 countries (Brandt, 1972). According to them vital functions are performed by the accounting, such as financial picture is provided by it, this information is used by wide array of users for making economic decision. It also provides the link between the decision makers and the economic activity. The first step in measuring the economic activity is the registering of data, so that it can be further utilized. The next step in the processing of accounting data into useful information, they are stored according as long as they are needed or else discarded. Further down, the information is made parts of different reports so that it can be utilized by decision makers. It can be said, that the economic activity data is the primary data for the accounting system and is important for decision makers. The accounting system followed in the Glaxo Smith Kline is based on the fair accounting practices and are no different from any other organization. In this section the further element covered are the processes which follow and are in align to the best accounting practices (Ardalan, A., 2000).



Purposeful activities in a business

The performing of an economic activity is what a business is based on, the main idea on which the business work is buying and selling of services and goods to the consumers so that adequate returns can be earned by the seller. Although, company perform different activities but the main goal is to ...