To: Elizabeth Bruce ? Line Manager
From: Charvin Ebanja ? Accountant
Date: 7 November 2002
Subject: Introduction and discussion of Directors (Pentium plc) concerns about the use of published financial statements for evaluating the success of a company. You should discuss the purpose of financial statements for various stakeholders. You should also discuss the impact the different accounting policies have on the final published figures.
The company we have chosen to focus on is the Selfridges Group plc. In this report we will look at the published financial statements to analyse their financial performance and positioning. We will also focus on the objectives, limitations and users of financial statements. As well as the how the various accounting policies impact on these statements.
Before discussing directors concerns we must look at the objectives of the financial statements. The ASB states in their statement of principles, that the objective of financial statements
? To provide information about the reporting entity's financial performance and financial position that is useful to a wide range of users for assessing the stewardship of management and for making economic decisions.
? It can usually be presumed that this objective can be met by focusing exclusively on the information needs of the defining class of user, investors.
? Investors need information about the reporting entity's financial position and performance that is useful to them in evaluating the entity's ability to generate cash ( including the timing and the certainty of its generation) and assessing the entity' ...