There are four significant elements of financial management, “There are four basic financial statements. You can think of them as a set. They include the balance sheet, the statement of revenue and expense, the statement of fund balance or net worth, and the statement of cash flows.” (Baker & Baker, Chapter 4, 2011). Financial manager need to have a balance sheet to review or perform an audit so they can see the debt to income ratio for the organization they are financially responsible for. The statement of revenue and expense provide a clear financial outlook of the organizations financial situation during certain time periods. The significance of the statement of fund balance or net worth is to identify cash and property assets of the organization within a year or other period of time. Last but not least the statement of cash flow is proof of all of the profit by the organization during a certain period of time.
There are accounting principles that are generally accepted, while there are some to be cautious of as well.According to University of Phoenix Transparency and Accountability (2005) “I believe it is critical for not-for-profit provider organizations to demonstrate their fiscal integrity by becoming as compliant as feasible with this and other appropriate sections of Sarbanes as soon as possible. “Although the Sarbanes-Oxley act is not a requirement for non-profits it is becoming a common accounting practice does to its quality standards and familiarity amongst government and organizations. “More than three out of four CFOs say that accounting fraud is more prevalent today than it was ten years ago. But only 42 percent believe that limiting the consulting services auditors can give their clients will reduce instances of fraud.” (University of Phoenix, 2002, para. 3). As a result companies and organizations need to document true finances even if it doesn’t meet the expectations of Wall...