FINANCIAL REPORTS AS ACCOUNTING PRODUCTS

Abstract

In the information era, companies believe that their success or failure is increasingly dependent on the use and management of information. Information era has an impact on accounting, too. Financial statements represent the final stage of processing accounting data and appear as holders of accounting information. The main objective of financial statements is related to relevant and reliable information users of financial position and business performance. The subject of this research work concerns the identification of interdependencies of information from a set of financial statements as the product of accounting in accordance with the needs of enterprise management, and other stakeholders, users of financial statements. In this context, the basic components contributing to improving the quality of the mentioned relationship are determined. The quality of financial statements primarily depends on how the information contained therein can meet the needs of internal users (usually management) and external users (primarily investors and creditors) in terms of their relevance, understandability, reliability, and comparability. Mentioned data are contained in a financial statement of which stand out as the basic balance sheet and income statement. The paper indicates that for management purposes, two mentioned reports are two ways by which can give an illustration of the company in terms of the operation flow in a particular period of time and in terms of position or status of the company at a given point of time. Accordingly, the well-informed means that the financial statements are established and presented with all relevant information that may be of significant impact for the needs of enterprise management, and future decisions of investors and other users.