ISSUES IN FINANCIAL REPORTING Essay Example | Topics and Well Written Essays - 2500 words

ISSUES IN FINANCIAL REPORTING - Essay ExampleThe analysis of the enterprises performance is critical because it helps decision makers such as the investors and managers for effective decision-making. The analysis of performance provides information about the efficiency of allocation of resources and factors causing the business non to come through its objectives (Hargreaves 2015) The trend analysis will enable the stakeholders in making an assessment as to whether the company is improving or not improving and how hawkish the company is in the industry (Alexander, Britton & Jorissen, 2011). The report provides causes for observed performance in the particular company. The report offers a recommendation on the areas that require improvement to achieve better financial performance.Corporate nerve refers to a method of directing and controlling companies. It involves balancing between brotherly and individual goals or economic and social goals to align the interests of the businesse s, individuals and the society as close as is practicable (European Accounting Review, 2015). It specifies the correlation between shareholders, the bill of fare of the company and other stakeholders. Also, it provides the structure for setting up companys objectives, approaches for attaining these goals and determines how to monitor the performance (Alexander et al., 2011). Corporate governance eases operational, innovative and sensible management that can promote continuous performance of the business. Corporate governance is reinforced by various theories such as agency theory, stakeholders theory, resource dependency theory and stewardship theory.The responsibility of governing corporations is bestowed upon the board of directors. Shareholders have the responsibility of appointing the board of directors to ensure to ensure effective corporate governance (European Accounting Review, 2015) On the other hand, the board of directors sets the