Management Reporting system

A management reporting system is essentially a mechanism for monitoring the

'mission' of an organization.Management reporting is that part of management
control system which provides various information to the management in the form
of report and statement at regular interval. Management reporting is the instrument
for making control and decision effective.

Types of Management Reporting System

Reports are the formal vehicles for conveying information to managers. The term
report tends to imply a written message presented on sheets of paper. In fact, a
management report may be a paper document or a digital image displayed on a
computer terminal. The report may express information in verbal, numeric, or
graphic form, or any combination of these.

❖ Programmed Reporting
Programmed reports provide information to solve problems that users have
anticipated. There are two subclasses of programmed reports:

I. Scheduled reports
II. On-demand reports.

Scheduled Reports
The MRS produces scheduled reports according to an established time frame. This
could be daily, weekly, quarterly, and so on. Examples of such reports are a daily
listing of sales, a weekly payroll action report, and annual financial statements.

On-demand Reports
On demand reports are triggered by events, not by the passage of time. For
example, when inventories fall to their pre-established reorder points, the system
sends an inventory reorder report to the purchasing agent. Another example is an
accounts receivable manager responding to a customer problem over the telephone.
The manager can, on demand, display the customer’s account history on the
computer screen.

❖ Ad Hoc Reporting
Ad hoc reporting refers to reports that are put together creatively by users in real-
time, rather than pre-designed according to a template.The idea of ad hoc reporting
is also used to talk about 'one-off’ or one-time reports that are done in a customized
way, to provide results for one specific question or objective.

❖ Exception reports
In management, exceptions warrant greater attention than any normal event.
Exception reports are special reports that indicate to the manager that some control
needs to be exercised to bring an issue under control. For example, if in a company
the average absenteeism is two per cent and in the last week, the average
absenteeism is twenty percent then an exception report is generated to make the
concerned manager aware that something is amiss and needs attention.
❖ Predictive reports
These are special reports that give the manager a sneak preview of the future.
These reports give a scenario of the future and are very useful for planning.
❖ Summary reports
These are general reports that aggregates data and provides summarized
information to the manager so that he may get a macro view of an issue.
❖ Regulatory and statutory report
These are reports created under the obligations to follow rules and statues. They
are primarily meant for external consumption for the information needs of
regulatory bodies. Thus, we see that the reports tell the manager the issue behind a
problem and give him all the information he needs to take decisions. However,
information can be of various degrees of value to a manager. A set of information
that he already knows is' of little value to him incorrect information has a negative
value. So we must understand the meaning of valuable information.
UNDERSTANDING THE
IMPORTANCE OF AN
EFFECTIVE MANAGEMENT
REPORTING SYSTEM
WHAT?
A management reporting system is a part of a management control
system that provides business information. This information can
be in the form of reports and/or statements. The system is
designed to assist members of the management by providing
timely pertinent information.

WHY?

WHY DO WE NEED AN EFFECTIVE MANAGEMENT

REPORTING SYSTEM?

Management reporting systems help in capturing data that is

needed by managers to run an effective business. Data could range
from financial data, employee headcount, client, accounts,
products, client assets in custody, investment performance, etc.
The scope of a management reporting system is wide. However,
here are the six reasons why an enterprise needs an effective
management reporting system:

1. Constant need of reports for decision making and analysis of

trends

2. Reports being unavailable with the right stakeholders at the

right time

3. Lack of visibility and a single holistic view of the enterprise

performance

4. Data redundancy, duplication of data leading to data

management and quality issues leading to error prone reports

5. High value resources

6. Changing a global report to fit local needs

An effective management reporting system helps:

1. Improve decision making

2. Improves management effectiveness

3. Improves responsiveness to issues

4. Improve efficiency of resources in the delivery of organizational

services
Traditionally, MR systems were only used to pull up information.
However, the system has undergone tremendous transformation
over the years, making it a robust platform for reporting and
management. Due to the advancement in technology, it can now
provide financial and non-financial information, which can help
management take the necessary action to control their business
activity.

Traditional bookkeeping activities can now be automated, thanks

to the advancement in IT. The system plays a greater role in
helping management take good business decisions.

It helps in:

1. Identifying the problem

2. Evaluate alternate solutions

3. Implement the best solution

4. Review implementation

HOW?

FIVE ESSENTIALS OF AN EFFECTIVE

MANAGEMENT REPORTING SYSTEM
A MR system should be able to generate good reports: They should
be generated in a timely manner, should have the proper flow of
information, and should be in the correct format.

1. The system should be flexible enough to adjust to all the

requirements that are made by the user. It should also provide
insights if deviations from predefined standards or estimates
occur. It should do all these while being economical to the
organization. Localization of reports helps in keeping them
simple. Enterprises should concentrate more on localizing their
MR systems, as it simplifies reporting. This helps in taking
better decisions for each area or domain.

2. A MR system is expected to be accurate. There shouldn’t be any

discrepancies in terms of reporting. These systems evaluate a
company’s result at any given point in time, hence they need to
be accurate. The reports that are generated by the systems will
be used by senior management, more so C level executives —
therefore the need for accuracy is high!

3. A management reporting system is only effective when it

promptly generates reports. If it doesn’t produce reports when
needed, there is no point of having a management reporting
system. With the technology that is available, enterprises can
obtain information faster and more often.

4. A crucial factor for any management reporting system is for it

to be cost effective. Reports from this system should never be
 too difficult to assemble. Also, they should be able to justify
their costs. Being cost effective can be the deciding factor for
enterprises to opt for a MR system.

5. Ultimately, reports that are generated from the system should

help the management take informed decisions. Meaning, the
reports should be detailed enough to let management know
where the next change should be.

6. There will be a constant need among executives to obtain the

newest information in the most detailed and convenient way
possible. Thereby, based on the ever-changing parameters, new
reports should be proactively created or the necessary changes
must be done to the existing reports itself.

7. Also, an automated delivery of reports (both static and

dynamic) based on the organizational hierarchy levels is a
critical contributing factor for the success of a MR system.

8. Finally, an effective management reporting system should

maintain a high-level of consistency in terms of the reports’
look and feel and the technology, tools and processes used for
all reports.

Conclusion

Effective Management Reporting Systems require skill to develop

and implement. Correct KPIs should be identified and measured;
the structure, format, and content of the reports discussed to ease
decision making. As the reporting system requires experience and
time to set up and maintain, it is recommended that enterprises
consult dedicated professionals to fulfil the role.
CHAPTER 31 Reporting to Management Introduction The success or otherwise of any business
undertaking depends primarily on earning revenue that would generate sufficient resources for sound
growth. To achieve this objective, the management should discharge its functions efficiently and
effectively. The reporting systems are highly useful to the management for effective planning and
control. A regular system of reporting is considered as a better guidance for prompt decision making.
Hence, it is necessary to have a good management reporting system. DEFINITION OF MANAGEMENT
REPORTING According to Kohler reporting refers to "A body of information organized for presentation or
transmission to others. It often includes interpretations, recommendations and findings with supporting
evidence in the form of other reports." , 'Management Reporting' may be defined as "A system of
communication, normally in the written form, of facts which should be brought to the attention of
various levels of management who use them to take suitable action." In other words the process of
providing information to the management is known as Management Reporting. The word "Information"
refers to the data processed or evaluated for a specific purpose. Dr. Maheshwari has also defined
Management reporting system as "an organized method of providing each manager with all the data
and only those data which he needs for his decisions, when he needs them and in a form which aids his
understanding and stimulates his action." Objectives of Management Reporting (1) To obtain the
required information relating to the business to discharge its managerial functions of planning.
organizing, controlling. directing, and decision making etc. efficiently and effectively. (2) To ensure the
operational efficiency of the concern. (3) To facilitate the maximum utilization of resources. 676 A
Textbook of Financial Cost and Management Accounting (4) To secure industrial understanding among
people who are engaged in various aspects of work of enterprise. (5) To enable to motivating improving
discipline and morale. (6) To help the management for effective decision making. Essentials of Good
Reporting System The following are the essentials of a good management reporting system : (1) Proper
Form: A good report should have a comprehensive form with suggestive title, heading, sub heading and
number of paragraphs as and where necessary for easy and quick reference. (2) Contents : Simplicity is
one of the requisites of reporting in relation to the contents of a report. Further the contents should
follow a logical sequence. Wherever necessary the contents should be represented in the form of visual
aids such as charts and diagrams etc. (3) Promptness : It means that the system should ensure the
preparation and submission of report at the proper time. It facilitates business executives to make
suitable decisions based on quick reports without delay. (4) Accuracy: Information conveyed should be
accurate. This means that the person responsible for reporting should have sufficient care in preparing
the report as correctly as possible within the parameters of possible accuracy in this regard. (5)
Comparability : In order to ensure that the furnished information is useful, it is essential that reports are
also meant for comparison. The report should provide information about both the actual and the
budgeted performance of the budget period. So that meaningful comparison can be made to find out
the deviations and to initiate appropriate action. (6) Consistency : In order to make a meaningful and
useful comparison, uniform accounting principles and procedures should be followed on consistent
basis over a period of time for collection, classification and presentation of accounting information. (7)
Relevancy : The report should be presented with relevant data to disclose the fact in unambiguous
terms. Because, inclusion of both the relevant and the irrelevant data in the management reports may
result in faulty decisions. Therefore, the contents expressed therein should reveal the reporter's greater
consciousness of expression with reference to length and time in particular. (8) Simplicity : The report
should be as far as possible in simple form. In other words, the report should avoid technical jargons,
duplication of work and presented in a simple style. (9) Flexibility: The system should be capable of
being adjusted according to the requirement of the users. (10) Cost-Benefit Analysis: Cost-Benefit
Analysis should be made and the cost of reporting should commensurate with the expenditure involved.
(11) Principle of Exception : Since the time and effort of managerial personel are precious, the principle
of management by exception has become the rule of the day instead of exception. It is necessary
therefore to draw the attention of management, through reports, only towards exceptional matters.
(12) Controllability : It is necessary that every report should be addressed to a responsibility centre and
analysed the factors into controllable and uncontrollable separately. So that the head of the
responsibility centre can be held responsible only for controllable variance but not for variances which
are beyond his control. Reporting to Management 677 Further, in order to assist the management to
imitate remedial measures, probable reasons for the factors of uncontrollable should also be
incorporated in the reports. Classification of Management Reporting Basically, there are two ways to
report to the management. They are (1) Oral Report and (2) Written Report. The Written Reports may
be classified into number of ways. The following are the important types: I. According to Objects: (A)
External Reports (B) Internal Reports (1) Reports Meant for Top Management (2) Reports Meant for
Middle Level Management (3) Reports Meant for Junior Level Management II. According to Period: (1)
Routine Reports (2) Special Reports III. According to Functions: (A) Operating Reports (1) Control Reports
(2) Information Reports (3) Venture Measurement Reports (B) Financial Reports (1) Static Reports (2)
Dynamic Reports The following chart explains this more about the types of reporting : Types of
Management Reporting t t t Oral Reports Written Reports t J According to Objects According to Period
According to Functions External Reports Internal Reports Routine Reports Special Reports Operating
Reports Financial Reports To the Top Management J To the Middle Level Management To the Junior
Level Management Control Reports J Information Reports ! Venture Measurement Reports Static
Reports Dynamic Reports Reporting to Management 679 According to Object or Purposes (A) External
Reports: These reports prepared for persons outside the business such as Government. shareholders.
bankers. investors and financial institutions etc. External Reports usually represent published annual
reports. Annual Reports of Trading. Profit and Loss Accounts and Balance Sheet of the Indian Companies
are to be prepared in terms of Schedule VI of the Indian Companies Act of 1956. (8) Internal Reports :
Internal Reports are those which are prepared for internal uses of different level of management. It is
also called as Management Reports. These reports are not meant for disclosure to those who are
outsiders to the business. They do not have to comply with any statutory requirements. From the
managerial point of view the reports can be classified into the following categories : (1) Report Meant
for the Top Level of Management (2) Report Meant for the Middle Level of Management (3) Report
Meant for the Junior Level of Management (1) Report Meant for the Top Level of Management Top
Level Management is concerned with the formulating policies planning and setting goals and objectives.
This level of management consisting of the Board of Directors including Chairman. Managing Directors.
General Manager or any other chief executive as the case may be. The report to this level of
management should be specifically summarized with all aspects of operating performance together with
a comparison of actuals with budgeted performance. The usual reports sent to this level of management
are: (a) Reports on budgeted and actual profit (b) Reports on sales and production (c) Capital budget (d)
Master budget (e) Periodical financial reports (f) Plant utilization report (g) Machine and labour
utilization report (h) Reports on research and development activities (i) Project evaluation report G)
Report on stock of raw materials, work in progress and finished goods (k) Overhead cost absorption and
efficiency reports (I) Reports on selling and distribution overhead. (2) Reports Meant for Middle Level
Management The Middle Management is constituted of the heads of all departments such as
production department headed by production manager. marketing department headed by marketing
manager and so on. This level of management is concerned with the functioning and control of their
departments. They act mainly as coordinating executives to administer policies directly through
operating supervisors and evaluate their performance. Hence. they may require more detailed
information about their departments and at frequent intervals. Generally. the middle level management
should receive the following reports at different intervals: 680 A Textbook of Financial Cost and
Management Accounting (a) Purchase Manager: (1) Reports on material price and usage variance (2)
Reports on material carrying cost, loss of material in the storage etc. (3) Reports on trends in the
pertaining of various items of materials. (b) Materials Manager: (1) Reports on stock of raw materials,
work in progress and finished goods (2) Reports on material wastage and losses (3) Reports on stock of
materials planning and control (4) Reports on level of materials stock at the stores (5) Reports on surplus
and deficiency report. (c) Production Manager: (1) Reports on budgeted and actual production (2)
Reports on overtime work and ideal time (3) Reports on labour utilization statement (4) Reports on
machine utilization statement (5) Reports on scrap production cost (6) Reports on any accident causing
dislocation of activity. (d) Sales Manager: (1) Reports on budgeted and actual sales (2) Reports on sales
efficiency (3) Reports on orders received and orders executed (4) Reports on cash sales and credit sales
(5) Reports on stock of finished goods (6) Reports on market share and market potential (7) Reports on
sales promotion efficiency. (3) Reports Meant for Junior Level Management The lower level
management is directly responsible for executing various policies assigned by top management. This
level of management is constituted of Foremen, Supervisors and sectional in charges etc. They are in
touch with the day-to-day performance of their section. The report meant for this level are mainly in
terms of physical units. The usual reports sent to this level are : (1 ) Reports on labour efficiency variance
(2) Reports on ideal time, overtime and machine utilization (3) Reports on materials usage variance (4)
Reports on credit collections and outstanding
CHAPTER 1 CORPORATE FINANCIAL REPORTING – AN INTRODUCTION CHAPTER 1 CORPORATE
FINANCIAL REPORTING - AN INTRODUCTION 1.1 Introduction Accounting being regarded as the
language of business is as old as the business itself (Gupta and Mehra, 2002). It is a social phenomenon,
the primary object of which is to let the management know the economic activity of the corporate
enterprises (Mehrotra and Kulshrestha, 1990). Accounting has two fold phases, first measuring and
arraying the economic data and second communicating the results of this process to the interested
parties (Gupta, 1977). American Accounting Association (AAA, 1966) describes it as the process of
identifying, measuring and communicating economic information to permit informed judgments and
decisions by users of information. Accounting Principles Board (APB) of the American Institute of
Certified Public Accountants (AICPA) defined accounting as a service activity. Its function is to provide
quantitative information financial in nature and intended to be useful in making economic decisions and
making reasoned choices among alternative courses of action. Accounting includes branches i.e.
financial accounting, managerial accounting and government accounting (Singh, 2005). In 1975, the
American Accounting Association redefined accounting in broader sense as to provide information
which is potentially useful for making economic decisions and which if provided will enhance social
welfare. The primary function of accounting is recording the economic data of a business enterprise and
to facilitate the administration of its financial activities. It has to measure the economic activity i.e.
employment of its assets for profit; and disclose it in the financial statements and reports of the
financial aspects of the activities of the enterprise for a particular period (Saeed, 1990). Thus all the
activities of a business enterprise have to be disclosed to the shareholders and other users so that they
can develop their own attitude towards the firm and know that how efficiently the limited resources of
the organization are being utilized through sound decisions. Financial accounting was formerly
concerned with reporting from office managers to principals conveying that all was well with the book-
keeping of the business. But times now have changed with an increasing control by the corporate sector
over the economic activity; these financial reports have assumed greater importance. They are now
considered a corner stone in the trading structure helping to 2 bridge the gap between the producer and
the user, the owner and the manager and commerce and the government. Further, these reports are
consulted by a large sector of people, including the government, who have a wide range of interests in
them as owners, tax-receivers, workers, employees, administrators, producers, creditors, debenture-
holder and the like, besides labour-unions and shareholder’s associations (Gupta, 1977) 1.2 Concept of
Corporate Financial Reporting The concept of corporate financial reporting has gained much significance
due to the expansion and growth of company form of organization, increased competition and increase
in the information needs of the users (Singh, 2005) The corporate financial reporting is a system of
communication between the management and the user-groups of the financial statements; in order to
report the results of the business activities of a corporate enterprise and also to demonstrate the
credibility, accountability and reliability of its working (Saeed,1990) Kohler’s dictionary for accountants
defines it as an explanation or exhibit attached to a financial statement, or embodied in a report
containing a fact, opinion or detail required or helpful in the interpretation of the statement or report
(Cooper and Ijiri, 1984). As per American Accounting Association the financial reporting is the movement
of information from the private domain (i.e. inside information) into the public domain. It is a process
through which an entity communicates with the outside world (Chandra, 1974). The subject of financial
reporting has gained significance during the recent years because of various compelling factors, such as
the expansion and growth of the company form of organization; shift in the emphasis from the concept
of ‘shareholders’ to ‘stakeholders’ and increase in their informational needs; the enactments and
amendments in disclosure laws in various countries; professionalism of management; emergence of
accounting as a recognized profession; and the pronouncements on disclosure made by various
professional accounting bodies in India and abroad (Chander,1992). A series of scandals that have
rocked the financial markets and shaken investor confidence have further increased the importance of
financial reporting. There is a general consensus among professionals that a disclosure should be full,
fair and adequate. Full disclosure requires that financial statements should be designed and prepared to
portray accurately the economic events that affected the firm for the period and to contain information
sufficient to make them useful and not 3 misleading to the average investor (Porwal, 1989). The need
for adequate, fair and full disclosure is irrefutable in a free enterprise economy. One can’t over-
emphasize the importance of availability of information in investment decisions. It assists the investors
in selecting the best portfolio for their investment (Lal, 1985). In the absence of adequate information
investors would not be in a position to make wise investment decisions, because it will be difficult to
distinguish between potentially successful and unsuccessful business. (Chander, 1992) Besides investors,
disclosure is significant from the point of view of large number of other potential users. Such potential
users include, present and prospective investors, lenders, suppliers, creditors, employees, management,
customers, financial analysts and advisors, brokers, underwriters, stock exchange authorities, legislators,
financial press and reporting agencies, labour unions, trade associations, business researchers,
academicians and above all the public at large. Disclosure has behavioral implications for such a wide
range of users. There is an obvious need for reliable information which they can use to acquire an
essential knowledge of the way in which business enterprises are behaving in relation to the public
interest. By perceiving enterprise behavior through communicated information, interested parties can
use this knowledge to amend or adopt their own behavior vis-à-vis. the enterprise concerned (Lee,
1976). Thus financial reporting in fact is an effective communication of accounting information. The
concept of fair disclosure implies that the accounting and other information should be unbiased and
impartial. Its objective is to provide equal treatment to all potential financial statement readers (Chahal,
1990). The task of defining the term ‘adequate disclosure’ is more difficult because the adequacy of
disclosure cannot be tested accurately and precisely since no definite test exists in financial reporting to
measure it and moreover, it is a subjective term. In very comprehensive terms a disclosure can be an
‘adequate disclosure’ when it entails the answers of “to whom, why, how much, what and when the
information to be disclosed” (Chahal, 1990). 1.3. Objectives of Financial Reporting Corporate financial
reporting is not an end in itself but is a means to certain objectives (Devarajan, 2008). The fundamental
objective of corporate financial reporting is to communicate economic measurements of information
about the resources and performance of the reporting entity useful to those having reasonable rights to
such 4 information and interest in the entity (Oza, 1990). The annual financial statements of a company
not only aid its management to regulate the prices of its goods and services but also help its external
users in different ways such as existing and potential investors in evaluating their past decisions and
making changes in their investment policies, creditors in assessing company’s worthiness, profitability
and liquidity, and government in administering the system of taxing the companies (Bhattar, 1995).
Various agencies and professional bodies involved in promoting corporate financial reporting have
attempted to formulate objective of financial reporting as to make accounting information relevant and
useful (Singh, 2005). The Accounting Principle Board of America in 1970, True Blood Report in 1973,
Corporate Report London in 1975, Financial Accounting Standard Board (FASB) 1978 and The Stamp
Report 1980, Accounting Standard Board (ASB of U.K.) in 1991, Institute of Chartered Accountant of
India (ICAI) in 2000, FASB in 2006 and IASB and FASB jointly in 2007 have contributed in the formulation
of the objectives of financial reporting. The objectives of financial reporting given by these bodies have
been summarized below: 1.3.1 Accounting Principle Board (APB) 1970 The Accounting Principle Board of
America issued its Statement (4), Basic Concepts and Accounting Principles Underlying Financial
Statement of Business Enterprises, in 1970. This statement states 1 particular, 5 general and 7
qualitative objectives. The particular objective of financial statements is to present fairly and in
conformity with Generally Accepted Accounting Principles (GAAP), the financial position, the results of
operations and other changes in the financial position of an enterprise. The general objectives of
financial statements are: 1. To provide reliable information about economic resources and obligations of
a business enterprise in order to (a) evaluate its strengths and weaknesses, (b) show its financing and
investments, (c) evaluate its ability to meet its commitment and (d) show its resource base for growth.
2. To provide reliable information about changes in net resources resulting from a business enterprise’s
profit-directed activities in order to (a) show the investors the expected dividend return; (b) show the
organization’s ability to pay its creditors and suppliers, provide jobs for employees, pay taxes, and
generate funds for expansion; 5 (c) provide the management with information for planning and control
(d) show the long-term profitability of the enterprise. 3. To provide financial information useful for
estimating the earning potential of the firm. 4. To provide other needed information about changes in
its economic resources and obligations. 5. To disclose other information relevant to the needs of the
users. The qualitative objectives of financial reporting are: 1. Relevance, which means selecting the
information most likely to aid the users in their economic decisions. 2. Understandability, which implies
not only that the selected information must be intelligible but also that the users can understand it. 3.
Verifiability, which implies that the accounting results may be corroborated by independent measurers
using the same measurement methods. 4. Neutrality, which implies that the accounting information is
directed towards the common needs of the users rather than the particular needs of specific users. 5.
Timeliness, which implies an early communication of information to avoid delays in economic decision-
making. 6. Comparability, which implies that differences should not be the result of different financial
accounting treatments. 7. Completeness, which implies that all the information that is “reasonably”
needed to fulfill the requirement of the other qualitative objectives should be reported. The above
general objectives fail to identify the information needs of the owners and the creditors. The main
objective was to provide general purpose financial reporting, which provides information for unknown
users having multiple decision objectives. Providing information for specific user groups having known
decision objectives was not found operational. 1.3.2 The True Blood Report-1973 In view of the criticism
of corporate financial reporting, the American Institute of Certified Public Accountants appointed a
study group in 1971 under the 6 chairmanship of Robert M. True-blood. The study group visited various
places, interviewed executives, held meetings with institutional and professional groups and submitted
its report in 1973. The True-blood committee recommended 12 objectives of financial reporting. The
main objective is stated as under: “The basic objective of financial statements is to provide information
useful for making economic decisions.” The other eleven objectives are stated below: 1. To serve
primarily those users who have limited authority, ability or resources to obtain information and who rely
on financial statements as their principal source of information about an enterprise’s economic activity.
2. To provide information useful to investors and creditors for predicting, comparing, and evaluating
potential cash flow to them in terms of amount, timing, and related uncertainty. 3. To provide users
with information for predicting, comparing, and evaluating enterprise’s earning power. 4. To supply
information useful in judging management’s ability to utilize enterprise’s resources effectively in
achieving the enterprise’s primary goal. 5. To provide factual and interpretative information about
transactions and other events, which is useful for predicting, comparing, and evaluating enterprise’s
earning power. Basic underlying assumption with respect to matters subject to interpretation,
evaluation, prediction, or estimation should be disclosed. 6. To provide a statement of financial position
useful for predicting, comparing, and evaluating enterprise’s earning power. The statement should
provide information concerning enterprise’s transactions and other events that are part of incomplete
earning cycles. Current values should also be reported when they differ significantly from historical cost.
Assets and liabilities should be grouped or segregated by the relative uncertainty of the amount and
timing of prospective realization or liquidation. 7. To provide a statement of periodic earnings useful for
predicting, and evaluating enterprise-earning power. The net result of completed earning cycles and
enterprise activities resulting in recognizable progress towards the completion of incomplete cycles
should be reported. Changes in the values reflected in successive statements 7 of financial position
should also be reported, but separately, since they differ in terms of their certainty of realization. 8. To
provide a statement of financial activities useful for predicting, comparing, and evaluating enterprise-
earning power. This statement should report mainly on the factual aspects of enterprise transactions
having or expected to have significant cash consequences. This statement should report data that
requires minimal judgment and interpretation by the preparer. 9. To provide information useful for the
predictive process. Financial forecasts should be provided when they will enhance the reliability or
user’s predictions. 10. For government and not-for-profit organizations, an objective of financial
statements is to provide information useful for evaluating the effectiveness of the management of
resources in achieving the organization’s goals. 11. To report on those activities of the enterprise
affecting society which can be determined and described or measured and which are important to the
role of the enterprise in its social environment. The True Blood Report also presented 7 qualitative
characteristics which financial statement information should possess in order to satisfy needs of the
users. These are: 1. Relevance and Materiality 2. Substance rather than Form 3. Reliability 4. Freedom
from Bias 5. Comparability 6. Consistency 7. Understandability This study group considered the needs of
the investors and the creditors but there are other users of financial statements whose needs were not
given proper weight. 1.3.3 The Corporate Report, London 1975 The Accounting Standards Steering
Committee of the Institute of Chartered Accountants in England and Wales published the Corporate
Report as a discussion paper to review the list of users, purposes and methods of modern financial
reporting in 8 the United Kingdom. The basic philosophy of the report was that financial statements
should be appropriate to their expected use by the potential users. The report emphasized seven
characteristics viz, relevance, understandability, reliability, completeness, objectivity, consistency and
timeliness in addition to the other fundamental objectives of annual reports. The Corporate Report
suggested the need for the following additional statements: 1. A statement of Value Added to show how
the wealth was produced, and how it has been distributed among the employees, the state, the
providers of capital and its reinvestment for maintenance and expansion. 2. An employee report dealing
with the size and composition of the work force, efficiency, productivity, industrial relations, the
benefits earned, personnel policies, etc. 3. A statement of money exchanges with the government
showing sales tax, corporation tax, rates, royalties and other taxes paid to the government, i.e., financial
relationship between the enterprise and the state. 4. A statement of transactions in foreign currency
showing overseas borrowings and repayment, dividends received and paid by the government to other
countries. 5. A statement of future prospects showing forecasts of profits, employment and investment.
6. A statement of corporate objectives showing management policy and strategies. 1.3.4 Financial
Accounting Standard Board (FASB)-1978 The financial Accounting Standard Board laid down the
following objectives in November 1978 after considering the True blood Committee Report. (i) Financial
reporting should provide information that is useful to the present and potential investors and creditors
and other users in making rational investment, credit and similar decisions. The information should be
comprehensible to those who have a reasonable understanding of business and economic activities and
are willing to study the information with reasonable diligence. (ii) Financial reporting should provide
information to help the present and potential investors and creditors and other users in assessing the
amounts, timing and uncertainty of prospective cash receipts from dividends or interest and the
proceeds 9 from the sale, redemption or maturity of securities or loans. Since ‘investors’ and ‘creditors’
cash flows are related to enterprise’s cash flows, financial reporting should provide information to help
investors, creditors, and others, assess the amounts, timing and uncertainty of prospective net cash
inflows to the related enterprises. (iii) Financial reporting should provide information about the
economic resources of an enterprise, the claim to those resources (obligations of the enterprise to
transfer resources to other entities and owner’s equity), and the effects of transactions, events and
circumstances that change its resources and claim to those resources. (iv) Financial reporting should
provide information about an enterprise’s financial performance during a period. Investors and creditors
often use information about the past in assessing the prospects of an enterprise. Thus, although
investment and credit decision reflect investors’ and creditors’ expectations about future enterprise
performance, these expectations are commonly based at least partly on the evaluation of past
performance. (v) Financial reporting should provide information about how an enterprise obtains and
spends cash, about its borrowing and repayment of borrowings, about its capital transactions, including
cash dividend and other distributions of enterprises resources to the owners, and about other factors
that may affect an enterprise’s liquidity or solvency. (vi) Financial reporting should provide information
about how the management of an enterprise has discharged its stewardship responsibilities to the
owners (shareholders) for the use of enterprise resources entrusted to it. (vii)Financial reporting should
provide information that is useful to the management and the directors in making decisions in the
interests of the owners. The FASB emphasized the use of financial reporting for different classes of users
and not for the creditors and the investors only. Predictability was also included as an element of the
objectives of accounting information. The intention was to provide useful information for making
business and economic decisions by the parties having an interest in the organization. 10 1.3.5 The
Stamp Report-1980 The Canadian Institute of Chartered Accountants published report in June 1980 on
“Corporate Reporting-Its Future Evolution,” written by Edward Stamp and popularly known as Stamp
Report. It states the following as the objectives of financial accounting:- 1. One of the primary objectives
of published corporate financial reports is to provide an accounting by the management to both equity
and debt investors, not only for the management’s exercise of its stewardship function but also for its
success (or otherwise) in achieving the goal of producing a satisfactory economic performance by the
enterprise and maintaining it in a strong and healthy financial position. In short important objective of
financial reporting is the provision of useful information to all of the potential users of such information
in a form and in a time frame that is relevant to their various needs. 2. It is an objective of good financial
reporting to provide such information in such a form as to minimize uncertainty about the validity of the
information, and to enable the user to make its own assessment of the risks associated with the
enterprise. 3. It is therefore necessary that the standards governing financial reporting should have
ample scope for innovation and evolution as improvements become feasible. 4. The objectives of
financial reporting should be taken to be directed towards the needs of the users who are capable of
comprehending a complete (and necessarily sophisticated) set of financial statements or alternatively,
to the needs of experts who will be called on by the unsophisticated users to advise them. The Stamp
Report stressed the accountability of the management to equity and debt investors. It also emphasized
that information should be given in such a manner as to minimize uncertainty about the validity of the
information. The report should also include information on innovations and evolution of the enterprise.
It should be useful for both sophisticated and unsophisticated users. 1.3.6 The International Accounting
Standards Committee (IASC)-1989 The IASC issued a framework for the preparation and presentation of
financial statements in the year 1989. According to this framework the objectives of the financial
statements is to provide information about the financial position, performance and 11 changes in
financial position of an enterprise that is useful to a wide range of users in making economic decisions (
Porwal,2007). 1.3.7 Accounting Standards Board- 1991 The Accounting Standards Board of the U.K.
issued a “Statement of Principles” in July 1991.It states that the objective of financial statements is to
provide information about the financial position, performance and financial adaptability of an enterprise
that is useful to a wide range of users in making economic decisions (Porwal, 2007). The above
statement shows that the objectives of financial statements issued by the IASC and ASB are almost
similar. The ASB also stated that to meet the informational needs of the users is the basic objective of
financial statements, which can be fulfilled by preparing and presenting the general purpose financial
statements (Singh, 2009). 1.3.8 Institute of Chartered Accountants of India (ICAI) - 2000 Institute of
Chartered Accountant of India (ICAI) have also contributed in the formulation of the objectives of
financial reporting. The Accounting Standard Board (ASB) of Institute of Chartered Accountants of India
(ICAI) issued a framework for the preparation and presentation of financial statements in July 2000.
Following are the objectives of financial statements given in the framework for preparation and
presentation of financial statements by ICAI: • The objective of financial statements is to provide
information about the financial position, performance and cash flows of an enterprise that is useful to a
wide range of users in making economic decisions. • Financial statements prepared for this purpose
meet the common needs of most users. However, financial statements do not provide all the
information that users may need to make economic decisions since (a) they largely portray the financial
effects of past events, and (b) do not necessarily provide non-financial information. • Financial
statements also show the results of the stewardship of management, or the accountability of
management for the resources entrusted to it. Those users who wish to assess the stewardship or
accountability of management do so in order that they may make economic decisions; these decisions
may include, for example, whether to 12 hold or sell their investment in the enterprise or whether to re-
appoint or replace the management. ICAI has also stated four qualitative characteristics in its framework
for preparation and presentation of financial statements i.e. • Understandability, • Relevance, •
Reliability • Comparability According to the Institute of Chartered Accountants of India, there are three
constraints on relevant and reliable information i.e. timeliness, balance between benefit and cost and
balance between qualitative characteristics. These are explained in detail under the head qualitative
aspect of financial reporting. 1.3.9 Financial Accounting Standards Board (FASB)-2006 According to the
preliminary views on conceptual framework for financial reporting issued by Financial Accounting
Standards Board (FASB) of the Financial Accounting Foundation, the proposed objectives of financial
reporting are as under: • Providing information useful in making investment and credit decisions. •
Providing information useful in assessing cash flow prospects • Providing information about an entity’s
resources claims to those resources, and changes in resources and claims. Besides these objectives FASB
has also mentioned various qualitative characteristics of decision- useful financial reporting information
in the conceptual framework i.e. • Relevance, • Timeliness, • Verifiability, • Comparability •
Understandability. These characteristics are defined within the two constraints of materiality and
benefit and costs. (www.fasb.org) 13 1.4 Annual Report-The Most Useful Source of Financial Reporting
There are many media adopted by the companies for dissemination of information to outsiders. These
include prospectus, press releases, statutory reports, interim reports, financial dailies and magazines,
interviews between management representatives and the professional financial analysts and the
published accounts i.e. the ‘annual report’ (Chander, 1992). Of all these media, annual report is the most
significant channel of disclosure. It is the prime medium for projecting a company at its audience and is
the most effective voice in corporate communication (Haggie, 1984). Annual report is generally related
with the performance of the company during a particular accounting year. The Companies Act, 1956
provides the guidelines in connection with the preparation and presentation of the statutory part of
annual reports through its various sections leaving a vital zone of information to the discretion and
culture the companies may prefer to use (Datta, 1990). Annual report is the end product of the
accounting information process and set of accounting measurement rules. It reflects a combination of
recorded facts, accounting conventions and personal judgments of those who write up the accounts
(Jiloka and Verma, 2006). Annual repot is really directed to the community at large to whomsoever it
may have been formally addressed. All groups have access to it; their attitude may be influenced by it. It
is the single most important document in corporate reporting. It is a benchmark for measuring
performance, a periodic summary of progress and an auditing checkpoint (Bhattar, 1995). There are
several important reasons for treating the annual report as a valuable source of information to the
shareholders and other users. Firstly, annual report, being the audited document, provides
authenticated information about the issuing entity and thus creates confidence among the public.
Secondly, it is relatively more and easily accessible than any other source of information. Thirdly, annual
report is the single document, which contains besides financial statements, some other valuable
information such as highlights of the year, historical data, significant performance ratios, accounting
policies, price level adjusted statements, human resource accounting, segmental information,
company’s present and future policies, etc., which is not provided by any other single medium
(Chander,1992). Thus, annual report is the communication tool that is the reflection of corporate
performance, accomplishments, objectives and mission. 14 1.5 Qualitative Characteristics of Financial
Reporting Information which is reported to facilitate economic decisions should possess certain
qualitative characteristics. Qualitative characteristics are the attributes that make the information
provided in the financial statements useful to the users (Devarajan, 2008). One of the basic qualities of
published accounting information is that it should be credible or it should be believed by its users. If it
does not possess the quality of credibility, it will not be used (Bhattar, 1995).The Accounting Principles
Board of U.S.A suggested seven qualitative characteristics of published accounting information i.e.
relevance, understandability, verifiability, neutrality, timeliness, comparability and completeness.
Similarly the Trueblood Report also suggested seven qualitative characteristics which financial
statement information should possess: these are relevance and materiality, substance rather than form,
reliability, freedom from bias, comparability, consistency and understandability. FASB (1980) in SFAC
No.2 on ‘Qualitative Characteristics of Accounting Information’ has described these attributes as the
ingredients that make the information useful and the qualities to be sought when accounting choices
are made. These attributes can be viewed as a hierarchy of qualities, with usefulness for decision making
of most importance. Without usefulness, there would be no benefits from information to set against its
costs (Chander,1992). The various qualitative aspects of financial reporting are discussed as under: 1.5.1
Relevance Relevance is a dominant criterion in taking decision regarding disclosures of information
(Gupta and Mehra, 2002). Relevant information is that which satisfies the informational needs of the
users and helps them in evaluating the management and its policies for the purpose of their decisions
(Jiloka and Verma, 2006).It implies that all those items of information should be reported that may aid
the users in making economic decisions. (Saeed, 1990) information is relevant if it has the capacity to
confirm or change a decision maker’s expectations. First of all, purpose for which the information is
sought, should be identified, only when the information is purpose oriented and it becomes useful in
making rational decisions (Bhattar,1995) The Accounting Principle Board has described relevance as the
primary qualitative objective of financial accounting information.FASB in its concept No.1 has stated that
relevant accounting information must be capable of making a difference in a decision by helping 15
users to form predictions about the outcomes of past, present and future events or correct
expectations. The True Blood Report, the Corporate Report London and the Financial Accounting
Standards Board in its conceptual framework 2006 have also mentioned relevance as the qualitative
characteristic of decision-useful financial reporting information. The whole of the exercise of corporate
disclosure is futile, if the information disclosed is not relevant to the needs of the users (Chander,1992).
Thus the information, which is not relevant, is useless for the users. 1.5.2 Reliability Reliability implies
that information communicated should represent what it purports to represents and further being free
from error and bias also (Bhattar,1995). The True Blood Report and the Corporate Report London also
emphasized reliability as one of the qualitative features of financial reporting. Reliability helps in
decision making process. Reliable information can create confidence in the minds of the users. It is need
for reliable information that underlies the requirement that financial reports be audited by independent
auditors (Jiloka and Verma, 2006).Information has the quality of reliability when it is free from material
error and bias and can be depended upon by users to represent faithfully that which it either purports
to represent or could reasonably be expected to represent (Chander, 1992). For information to be
reliable; it must be verifiable to some degree, and it must be free from bias, i.e. objectivity or neutrality.
The AAA committee says that ‘verifiability requires that essentially similar measures or conclusions
would be reached if two or more qualified persons examine the same data’. Freedom from bias means
that facts have been impartially determined and reported. It also implies, that the events or results
should be reported in the financial statements without the bias or prejudice of the persons concerned
with reporting such information (Chander, 1992).Thus financial reporting should provide information
that is useful to the present and the potential investors and creditors and other users in making rational
investment, credit and similar decisions. 1.5.3 Understandability The Accounting Principles Board of
America in its statement No.4 stated understandability as the qualitative objective of financial reporting.
It implies not only that the selected information must be intelligible but also that the users can
understand it. The True Blood Report, the Corporate Report London and the conceptual framework 16
issued by FASB have also suggested understandability as an important characteristic which financial
information should possess. The information must be understandable, so that one can make use of it
without any specific knowledge of the subject (Bhattar, 1995). The information should be presented in
reports in such a way that it can be understood by reasonably well informed as well as by sophisticated
readers (Chander, 1992). Accounting information is more understandable if it is quantifiable, is
consistent, is comparable with similar information, and is simple. So consistency and comparability are
the two significant attributes of information which make it understandable and hence useful to the
users. Consistency refers to use of identical accounting practices, procedures and concept by the
enterprise from one period to another. Consistency is an important criterion in disclosure mechanism. It
makes the information comparable and thus helps the users in decision making. However, it should not
prove a bottleneck in bringing improvements in accounting practices and policies. Whenever users;
needs change over a period of time and require improvements in accounting policies and practices, the
new practices or procedures should be adopted and followed. Thus consistency is desirable until a need
arises to improve practices, policies and procedures (Bhattar, 1995). Comparability is an outcome of
consistency. It can be viewed from two angles, i.e. comparability of information between periods in case
of a single firm and comparability between firms (Chander, 1992).To make the information comparable
an enterprise should adopt the generally accepted accounting principles and accounting standards,
make disclosure of changes in accounting policies and explain about company’s accounting policies.
Understandability does not necessarily mean simplicity or using elementary terminology. It means the
presentation of information in clearest form so as to help in making best use of information by the users
and avoid confusion in their minds (Bhattar, 1995). 1.5.4 Materiality Concept of materiality is a basic
accounting concept. The True Blood Committee in its report has also suggested this as an attribute of
financial reporting. This concept implies that not all financial information should be reported, immaterial
information may be ignored while doing financial reporting (Gupta and Mehra, 2002). Information is
said to be material if its omission or misstatement would influence the economic decisions of users on
the basis of the financial statements (Chander,1992). 17 Kohler’s dictionary defines materiality as the
characteristics attaching to a statement, fact or item whereby its disclosure or the method giving it
expression would likely to influence the judgment of a reasonable person (Singh, 2005). Materiality
involves the use of judgment. No generally accepted guidelines have been established for judging
materiality. These judgments should be made considering the significance of information and its impact
on user’ economic decisions (Saeed, 1990).It is significant to note that some items though very smaller
in size and quantity, may be material because the materiality of an item not only depends on its relative
size but also on its nature or combination of both (Saeed, 1990). Thus information is material if it is
relevant to the decisions of the users, as materiality and relevance both are defined by reference to the
needs of users in making economic decisions. 1.5.5 Timeliness Timeliness which is an ancillary aspect of
relevance means having information available to decision makers before it loses its capacity to influence
decisions. (Anonymous,2006).The Accounting Principle Board (APB) in its Statement No.4 (1970) “Basic
Concepts and Accounting Principles Underlying Financial Statements of Business Enterprises” has
mentioned ‘timeliness’ as one of the qualitative objectives of financial reporting. According to this
statement, “timely financial accounting information is communicated early enough to be used for
economic decisions which it might influence and to avoid delays in the making of these decisions” (Kohli,
1998). Similarly the Corporate Report London (1975) issued by the Accounting Standards Steering
Committee (ASSC ) of the Institute of Chartered Accountants in England and Wales observed that if the
reports are to be useful and to fulfill their fundamental objectives, they must possess timeliness as one
of the characteristics. Further Financial Accounting Standards Board (FASB) in its conceptual framework
in the year 2006 has also mentioned timeliness as one of the qualitative features of financial reporting.
Timeliness means having information available to decision makers before it loses its capacity to
influence decisions (Meena, 1995). Timeliness alone cannot make information relevant but a lack of
timeliness can rob information of relevance it might otherwise have had (Singh, 2005). Timely disclosure
is fundamental to good investors relations. If information would be disclosed timely, decisions could be
taken by the users promptly and exactly (Jiloka and Verma, 2006). Thus the accounting information must
be communicated before its usefulness is lost or when its decision is due, it should be available to its
users. Information has its time value (Bhattar, 1995). 18 1.5.6 Completeness The Accounting Principle
Board of America in its Statement No. 4 mentioned completeness as the qualitative objective of financial
accounting, According to this statement ‘completeness’ implies that all the information that is
reasonably needed to fulfill the requirement of the other qualitative objectives should be reported. The
True Blood Study Group in its report stated, “The qualitative characteristics of financial statements, like
objective, should be based largely upon the needs of users of the statements. Information is useless
unless it is relevant and material to user’s decision. Information should be as free as possible from any
biases of the preparer. In making decisions user should not only understand the information presented,
but also should be able to assess its reliability and compare it with information about alternative
opportunities and previous experience. In all cases information is more useful if it stresses economic
substance rather than technical form” (Bhattar, 1995). Similarly, Corporate Report London has
suggested ‘completeness’ as an essential feature of financial reporting. The accounting information
must be complete from the point of view of statutory requirements and materiality. The users of
accounting must be provided with full information so that they may take right decisions at right time
(Bhattar, 1995). However; completeness is relative because financial statements cannot show
everything. To try to include in financial reporting everything that any potential user might want would
not be cost beneficial and might conflict with other desirable characteristics, such as understandability.
(Anonymous, 2006) Thus information disclosed through financial reporting must be complete within the
bounds of materiality and cost (Gupta and Mehra, 2002). An omission can cause information to be false
or misleading and thus unreliable and different in terms of its relevance. 1.5.7 Neutrality According to
Accounting Principle Board (APB), Neutrality means that the accounting information is directed towards
the common needs of the users rather than the particular needs of specific users. The accounting
information must be fair; it must be measurable and reported with as much objectivity and neutrality as
possible. The information must be based on firm verifiable evidence and it must not tend to benefit a
particular user at the cost of other users (Bhattar, 1995). Financial Statements are not neutral if, by the
selection or presentation of information; they influence the making of a decision or judgment in order to
achieve a predetermined result or outcome. 19 1.6 Constraints on Relevant and Reliable Information
1.6.1 Timeliness If there is undue delay in the reporting of relevant information it may lose its relevance.
To provide information on a timely basis it may often be necessary to report before all aspects of a
transaction or other event are known thus impairing the reliability. Conversely, if reporting is delayed
until all aspects are known, the information may be highly reliable but of little use to users who have to
make decisions in the interim. In achieving a balance between relevance and reliability, the overriding
consideration is how best to satisfy the information needs of users (Anonymous, 2000). 1.6.2 Balance
between Benefit and Costs The balance between benefit and cost is a pervasive constraint rather than a
qualitative characteristic (Anonymous, 2000). The benefits derived from any information should exceed
the cost of providing it. FASB says in its conceptual framework, “the benefits and costs from financial
information are usually difficult or impossible to measure objectively. Different persons will honestly
disagree about whether the benefits of the information justify its costs.” Furthermore, the costs do not
fall on those users who enjoy the benefits. Benefits may also be enjoyed by users other than those for
whom the information is prepared. For these reasons it is difficult to apply cost-benefit test in any
particular case. According to Singh (2005), the major benefits of the financial reporting to the investors
are the reduction of the likelihood that they will misallocate their capital. As far as costs are concerned
he has classified them into three parts: The cost of developing and disseminating information, the cost
of litigation attributable to informative disclosure, and the cost of competitive disadvantage attributable
to disclosure. 1.6.3 Balance between Qualitative Characteristics A trade-off between various qualitative
characteristics is very much necessary. The relative importance of different characteristics varies from
case to case. Generally the aim is to achieve an appropriate balance between the characteristics in order
to achieve the objective of financial reporting (Anonymous, 2000). 20 References AAA (1966). A
Statement of Basic Accounting Theory (ASOBAT) Evanston, Illinois, USA. Accounting Priniciples Board
(1970). Statement of Accounting Principles, No.4: Basic Concepts and Accounting Priniciples Underlying
Financial Statements of Business Enterprises, AICPA, New York. ASSC (1975). The Corporate Report,
Accounting Standards Steering Committee, ICAEW, London. AICPA (1973). Report of the Study Group on
Objectives of Financial Statements-The Trueblood Report, New York. Anonymous (2000). Framework for
the Preparation and Presentation of Financial Statements, issued by the Accounting Standards Board
(ASB) of ICAI, p. 19- 23. Anonymous (2006). Conceptual Framework for financial reporting: Preliminary
Views, Financial Accounting Standards Board (FASB) of the Financial Accounting Foundation, No. 1260-
001. Bhattar, M.M. (1995). Corporate Published Accounting Information and Investors, ISBN-81-900422-
9-7, Books Treasure Jodhpur, India. p.6. Chahal, S.S. (1990). New Prespectives in Corporate Financial
Reporting-Adequate Disclosure in Financial Reporting, in M. Saeed (Ed.), Corporate Financial Reporting,
ISBN 81-7041-348-6, Anmol Publications, New Delhi, p. 22. Chander, Subhash (1992), “Corporate
Reporting Practices”, ISBN 81-7100-411-5, Deep and Deep Publications, New Delhi, p. 1-2. Chandra,
Gyan (1974). A Study of the Consensus on Disclosure among Public Accountants and Security Analysts.
The Accounting Review, p. 733-742. Cooper, W.W., Ijiri and Yuji (1984.) Kohler’s Dictionary for
Accountants, Prentice Hall of India Pvt. Ltd., New Delhi. Datta, Manipadma (1990). Corporate Financial
Reporting in India-The Changing Prespective, in M. Saeed (Ed.) Corporate Financial Reporting, Anmol
Publications, New Delhi, p.75-92. Devarajan, R. (2008). Financial Reporting. ISBN No. 978-81-8441-070-
9.Vol. I, p. 3.3, A Book by Board of Studies, Institute of Chartered Accountants of India. FASB (1978).
Statement of Financial Accounting Concepts No.1: Objectives of Financial Reporting by Business
enterprises, Financial Accounting Standards Board, in The Journal of Acountancy,Feb.1979, p. 90-98.
Gupta, S.K. and Mehra, Arun (2002). Contemporary Issues in Accounting, ISBN- 81- 272-0389-0, p.1.
Gupta, N. Das (1977). Financial Reporting in India, Sultan Chand and Sons, New Delhi, p. 3. Haggie, David
(1984). The Annual Report as an Aid to Communication Accountancy, p. 66-67. 21 IASC (1989).
International Accounting Standards Committee, Framework for the Preparation and Presentation of
Financial Statements, The Chartered Accountant, Aug. pp.124-132. Jiloka, S.K. and Verma S. (2006).
Corporate Financial Disclosure. The Management Accountant, 41(11): 867-871. Kohli, Pooja (1998).
Corporate Disclosure Practices- A comparative Study of the Indian and The U.S. Companies., A Ph.D
thesis submitted to the University Business School, Punjab University Chandigarh. Lal, Jawahar (1985).
Financial Reporting by Diversified Companies. Vision Books, Delhi, p. 7. Lee, T.A. (1976). Company
Financial Reporting-Issues and Analyses.Thomas Nelson and Sons. p. XV. Meena, D.D (1995), “Corporate
Reporting Practices in Public Enterprises”, ISBN-81- 7000-189-7, Ess Ess Publications. P. 52. Mehrotra, H.
C. and Kulshrestha, D.K. (1990). Financial Reporting Practices in Public enterprises in India. In M.Saeed
(Ed), Corporate Financial Reporting, Anmol Publications, New Delhi, p. 7. Oza, H.S. (1990). New
Prespectives in Corporate Financial Reporting in India. In M. Saeed (Ed.) Corporate Financial Reporting,
Anmol Publications, New Delhi, p. 30. Porwal, L.S. (1989). Accounting Theory-An Introduction. Tata Mc
Graw-Hill, ISBN-0- 07-463820-3, Third Edition, p. 81 and 136-137. Saeed, M. (1990). The Theory of
Corporate Disclosure and its Applications in Financial Reporting. In M. Saeed (Ed.) Corporate Financial
Reporting, Anmol Publications, New Delhi, p. 237. Singh, Kashmir (2005). Financial Reporting Practices of
Banking Companies in India. A Ph.D. Thesis submitted to H.N.B. Garhwal University, Srinagar. Singh,
Manjit (2009). Corporate Disclosure Practices in India-A Study of Large and Mid- Cap Companies. A Ph.D.
Thesis submitted to the Faculty of Business Studies of the Punjabi University, Patiala www.fasb.org
www.icai.org