ACC1200 Lecture Notes - Lecture 1: Faithful Representation, Ibm General Parallel File System, Corporations Act 2001
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This is because the information is usually detailed enough to assist them in initial management planning: evaluate the success of the business entity in achieving its objective. Use accounting information to help them evaluate (cid:449)hethe(cid:396) the e(cid:374)tit(cid:455)"s (cid:373)a(cid:374)age(cid:396)s ha(cid:448)e (cid:271)ee(cid:374) app(cid:396)op(cid:396)iate ste(cid:449)a(cid:396)ds o(cid:396) (cid:272)ustodia(cid:374)s of the e(cid:374)tit(cid:455)"s assets. They examine entity reports to determine whether the entity has made appropriate business decisions on behalf of the investors, known as the stewardship function of management. Determine whether a particular entity is a sound investment. Using information like the financial structure of the entity (level of debt versus level of equity), current financial performance and its future growth prospects. All of which assist prospective investors in determining if capital growth is expected for the entity. I(cid:374)te(cid:396)est i(cid:374) gaugi(cid:374)g the e(cid:374)tit(cid:455)"s a(cid:271)ilit(cid:455) to (cid:396)epa(cid:455) de(cid:271)t a(cid:374)d the level of risk associated with lending funds to it.
