Q1)
Interim reports are financial reports prepared of period shorter than one fiscal year. I disagree with the above statement because it is important that time should be invested to prepare interim reports because summary of the report is published in the daily newspaper, and stock exchange wire services. Research analysts extract the data from the interim reports to analyze and forecasts the financial results of the companies that can help in investment options. If the company has positive interim report, a positive result will have a greater impact on investor confidence and the investment in company shares will increase. Accountants justify their lack of interest in preparing interim reports because they believe the results are meaningless and mostly inaccurate. In the company where there is no requirement to publish the reports, further lack of interest is shown by the employees to prepare the reports. It is important that this viewpoint is changed because even if the reports are not published and a summary is presented in newspaper, it will provide fair insight to the investors and I believe some information is better than nothing for investors to confide in their investment and company’s future. (EC Staff, 2012)
Q2)
Government institutions prepare different types of financial reports based on accepted accounting principles in order to provide accountability report to taxpayers. The change in the financial position of the government in fiscal year will eventually describe the overall result of government’s performance throughout. There are three main factors that a taxpayer should examine while scanning government financial position: change in net debt, the government cash position and annual surplus or deficit and to Any change in financial statement of government is essential to note which will help to evaluate the overall performance.
Reference
EC Staff (June 2012) “International Accounting Standard 34 Interim Financial Reporting” http://ec.europa.eu/internal_market/accounting/docs/consolidated/ias34_en.pdf
