Ethics 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 …show more content…
When organizations are reporting their financial statements properly they are in compliance and running a smooth organization, which is a plus for them, auditors, consumers, and Wall Street. Keeping clear and readable financial statements and conducting routine audits limit or possibly eliminate the occurrence for fraud and abuse within organizations. In “playing the expectations game” It discuss the consequences of not reporting financial statements properly and the difficulty organizations can have when they don’t adopt standard financial practices. In “Transparency and Accountability” it discuss which kinds of organizations have adopted the Oxley Act and which ones are becoming aware and beginning to utilize this practice as their own. The practice is utilized for for-profits and non-profits are beginning to follow