Accounting and Financial Reporting
Accounting and financial reporting
The preparation and presentation of financial statements refers to the Financial Accounting Standards set by the Financial Accounting Standards Board-IAI. Currently, outline Financial Accounting Standards contains 59 PSAK with basic framework Drafting and presentation of financial statements that are melandasinya and 4 IPSAK. Financial accounting standards set by the IAI is an adaptation of the International Accounting Standards.
Adoption of International Accounting Standards into the Financial Accounting Standards Board accounting standards by the Financial Accounting harmonization efforts as one of Indonesia and the international financial accounting practices in an attempt to answer the challenge in the era of globalization.
Accounting is often referred to as “the language of business” because the accounting is an information system that provides reports for the parties concerned (stakeholders) concerning the economic activity and the condition of a company. Accounting can be defined as the process of recording, measurement and delivery of information economy in order to be used as the basis for decision-making or wisdom. The information is presented in the form of accounting reports or better known as the financial statements.
The purpose of financial statements is to provide information about the financial position, performance, and corporate cash flow that will benefit the majority of the users of the report in order to make economic decisions and demonstrate accountability for top management (stewardship) use of the resources entrusted to them.
There are four main types of financial statements, the balance sheet (report of changes in financial position), income statement, report a change of equity and cash flow statement. Financial reporting (financial reporting) include not only financial, but also other media that can be used for communicating information either directly or indirectly related to the accounting process. For example, the annual report to shareholders not only contains the primary financial statements, as noted above, but also other information, such as the ratio-financial ratio is considered important, an overview of the number or account balance-specific account.
The parties related to the financial statements is the IAI, Bapepam, JSE, tax office and public accounting (Auditors) as well as the users of financial statements. In a different way each party has the same goal, namely producing quality financial reports (trustworthy and reliable, relevant, and timely).
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