Financial Report Essay Example | Topics and Well Written Essays - 250 words

Financial Report - Essay Example The company has a wide range of stakeholders such as the investors, the creditors, the government, customers, employees and the public. As mentioned above, the user’s have diverse needs, which are met through the provision of the financial statements. The key features in Sandall Arnold’s financial statements are the income statement, the statement of the financial position for two years, 2012 and 2013, and the independent auditor’s report (Gibson 2009, pp. 193) If the provision of the  £ 30 million worth of claim is not included in the Sandall Arnold’s financial statement, the auditor will issue a modified audit opinion ( type: likelihood of a misstatement) for the reason that all other items are correctly stated but the provision. However, if the provision is made, the auditors will give an unmodified opinion showing that the company’s financial statements present â€Å"a true and fair view† of the financial position. The two corporate governance deficiencies identified are the failure of the board of directors to develop remuneration package of other directors based on performance evaluation. Second, the board of directors disregarded a significant internal management process (performance evaluation). In order to improve decision making, the management should observe the rules and regulations set out by the company’s founders. Second, the board of directors should exercise fairness and probity when making de cisions (Bagshaw 2013, pp. 20-23) Based on the two-year income statement of Sandall Arnold’s company, the company’s revenue increased by 1.612% between 2010 and 2013. The gross profit increased by 96% between the two periods. The costs of sales decreased by 8.969% between the two periods. The profit before tax increased by 242.86% and the profit increased by 200% between the two years. The above movements are due to the revenue increase and a decrease in costs of goods sold