What Are the Different Types of Financial Statement Forms?

Financial statements are accounting statements that reflect the status of funds and profits of an enterprise or budget unit for a certain period of time. The types, formats, and reporting requirements of China's financial statements are stipulated by a unified accounting system, requiring enterprises to prepare periodic reports. At present, state-owned industrial enterprises should report capital balance sheets, special funds and special appropriations, capital borrowings and special borrowings, as well as profit statements, profit statements such as product sales profit schedules, etc. Submit the balance sheet, operating status sheet and special fund sheet. ^[1]

Financial Statements

Financial statements are

Composition of financial statements:

A complete set of financial statements including balance sheets,

Accounting statements should be submitted to owners,

1.Divided into monthly, quarterly and annual reports according to the time of compilation;

2. According to the preparation unit, it can be divided into unit report and summary report.

3. According to the report, it is divided into separate accounting statements and consolidated accounting statements.

4. Classified according to different standards:

(1) According to the service object, it can be divided into external reports and internal reports.

External statements

management

Management's ability to use financial statements to analyze shareholder income

The core formula of the system is as follows:

Equity net interest rate = net operating asset net interest rate + (net operating asset net interest rate-after-tax interest rate) × net financial leverage

= Net operating asset net interest rate +

1.Real numbers

The data in the financial report must be true and reliable, and truthfully reflect the financial status, operating results and cash flow of the enterprise. This is the basic requirement for the quality of accounting information.

2.Complete content

Financial statements should reflect the full picture of an enterprise's economic activities and comprehensively reflect the company's financial status and operating results in order to meet the needs of all parties facing accounting information. All financial statements required by the state must be prepared and submitted by all enterprises, and no omissions or omissions must be made. All information required by the state to be disclosed must be disclosed.

3.Accurate calculation

The daily accounting and the preparation of financial statements involve a large number of numerical calculations. Only accurate calculations can ensure the authenticity of the numbers. This requires that the preparation of financial statements must be based on verified account books and other relevant information. Estimated or extrapolated data must not be used, let alone falsification, playing digital games, or concealing lies.

4, timely submission

Timeliness is an important feature of information. Only when the financial statement information is passed to the information users in a timely manner can they provide a basis for users' decisions. Otherwise, even true and reliable financial reports with complete contents will not be used in a timely manner, which will greatly reduce the use value of accounting information for the report users.

5, complete procedures

The financial statements provided by the enterprise to the outside shall be affixed with a cover, bound into a volume, and affixed with an official seal. The cover of the financial statements should indicate: the name of the company, the unified code of the company, the organizational form, the address, the year or month to which the report belongs, the reporting date, and the person in charge of the enterprise and the person in charge of accounting work (Personnel) to sign and seal; the enterprise that establishes the chief accountant shall also be signed and sealed by the chief accountant.

As the direct basis for preparing financial statements is the accounting books, all the data of the reports are derived from the accounting books. Therefore, in order to ensure the correctness of the financial statement data, reconciliation and settlement must be done before the statements are prepared to ensure that the accounts are consistent and The accounts are consistent with each other to ensure the trueness and accuracy of the report data.

Financial accounting statement audit refers to the audit of the form, content, data and related information. It is an important means to comprehensively monitor, inspect and control the quality of accounting statements. It is the basis for summary and consolidated statements. It is a reasonable and careful audit. Statements can avoid repetitive work to a great extent, improve efficiency for the consolidation and summary of accounting statements, and also effectively guarantee the quality of accounting statements.

Formal audit of financial accounting statements.

It mainly reviews the correctness and rationality of financial accounting statements, their notes, and schedules.

Review of calculation relationships and check relationships in the table.

It mainly reviews the accounting relationships in the table and the accounting subjects with net amounts.

Examination of the relationship between financial accounting statements.

It is mainly the examination of the corresponding relationship among the balance sheet, profit statement, cash flow statement and profit distribution statement.

The financial statements mainly reflect the operating results and changes in the financial position of the enterprise for a certain period of time. There are six aspects to the financial statements to find problems or make judgments.

First, look at the income statement

Compare whether the income growth of the next two years is within a reasonable range. image

1. Factor analysis method. The factor analysis method is to analyze the influence degree of certain factors on financial indicators.

2. Comparative analysis. It can be actual and planned comparisons, current and previous comparisons, or comparisons with competitors. Through comparative analysis, it is possible to clarify the quantitative relationship and differences between various financial encounters of the enterprise, and provide a basis for later analysis.
3. Trend analysis method. Through the trend analysis, we can know the changes of the company's financial operations and provide help in predicting the future development direction.
4. Ratio analysis method. Through the ratio analysis, you can grasp the financial situation of the enterprise and the current status of the elite. In practical applications, the ratio analysis method generally combines the comparative analysis method and the trend analysis method.

Preliminary analysis of assets

Listed on the left of the balance sheet

Financial statements are the main components of financial reports. The accounting information provided by them is of great importance and is mainly reflected in the following aspects:

1. Comprehensively and systematically reveal the financial status, operating results and cash flow of the enterprise in a certain period of time, which is conducive to the operation and management personnel to understand the completion of various tasks and indicators of the unit, and to evaluate the management performance of the management personnel in order to identify problems and adjust the business direction , Formulate measures to improve the level of business management, improve economic efficiency, and provide a basis for economic forecasting and decision-making.

2. It is helpful for the national economic management department to understand the operation of the national economy. By summarizing and analyzing the financial statement data provided by various units, we can understand and grasp the economic development of various industries and regions in order to macro-control economic operations, optimize resource allocation, and ensure the stable and sustainable development of the national economy.

3. It is beneficial for investors, creditors and other relevant parties to grasp the financial status, operating results and cash flow of the enterprise, and then analyze the profitability, solvency, investment income, development prospects of the enterprise, and invest, loan and Trade provides the basis for decision-making.

4. Conducive to meeting finances,

Impact of the new accounting standards on financial statements:

1.Inventory changes

The new accounting standard abolished the last-in-first-out method, allowing part of the inventory borrowing costs to be capitalized, and the purchase cost of commodity circulation enterprises is included in the inventory cost. The revision of the inventory standards more truly reflects the circulation of the enterprise's inventory, which is conducive to the management of the enterprise and the users of taxation and other accounting information to make decisions based on the use and circulation of the inventory, and focuses more on reflecting the long-term operating conditions of the enterprise. Changes in the inventory standards have led to the increase in short-term stocks and operating profits of companies that originally adopted the first-in, first-out method, long production cycles, high inventory, and low inventory turnover.

2. Asset changes

Financial assets are reclassified into four types, which are subsequently measured using the fair value and actual interest rate methods, and their impairment is strictly controlled. The changes in the new accounting standards in financial instruments have changed the current financial statement data of enterprises to a large extent, causing large changes in corporate profits in the short term. For transactional financial assets, changes in profits depend on the direction of stock prices. and

Financial Statement Definition

In essence, fraudulent financial statements are an act that intentionally misleads users of financial statements. Misreporting financial statement data is its manifestation, and falsely increasing profits is its most commonly used method. A company from grassroots managers to senior managers may be involved in fraudulent financial statements; accounting firms and certified public accountants also bear corresponding legal responsibility for the results of fraudulent financial statements of customers.

Reasons for financial statements

1. Defects in the internal performance evaluation system of enterprises provide soil for report fraud

As the content and link of management, the internal performance evaluation of an enterprise is important to all levels of the enterprise. Without performance evaluation, there will be no competition for excellence, reward and diligence, and incentive and restraint mechanisms will not be implemented, and the company will have no vitality and vitality; without the performance evaluation system, the internal responsibility, power, and profit of the company cannot be combined. There is no motivation and pressure on employees, and the enterprise cannot continue to develop. However, excessive performance pressure is not desirable, otherwise fraud will be induced. For example, the wages and bonuses of employees are linked to performance, and the establishment of unrealistic performance budget indicators will induce them to misreport data; middle managers in order to complete upper management Unrealistic budget indicators issued by the department may also misrepresent the actual number of completions; in order to improve the company's financial image, senior managers may increase the price of their stocks in the market, or evade penalties for their poor performance, or may impose financial accounting Falsification of personnel and misrepresentation of data in financial statements.

2. Short-term goals tend to provide motivation for statement fraud

Accounting data is usually the "level" of management personnel, which is the basis for bonuses, benefits and wages of personnel at all levels. In some company's senior management departments, managers at all levels are clearly told that if they cannot achieve the company's profit target or investment income target this year, they will be fired next year, otherwise they will have the opportunity to be promoted to a new position or Transfer to another department of the company. This creates a motive for fraud for managers at all levels within the company. When the target profit target is not achieved, they will try to find ways to falsify and misrepresent the financial statement data.

3. Encouragement by senior management to encourage report fraud

The first is the attitude of top management to deal with internal company fraud. If senior management adopts an "open one eye, close one eye" attitude towards minor unethical frauds that occur within the company, the fraud inside the company will spread or even intensify. Second, the senior management needs for certain purposes, such as issuing new shares or issuing bonds or bank loans, or conducting other unscrupulous activities. They not only recognize the fraud of their subordinate units, they even instruct or Encourage financial and accounting personnel to misrepresent and misrepresent financial statement data.

Financial Statement Type

1.Recognition of revenue or manufacturing revenue in advance

Accounting should truthfully reflect economic business and objectively and truthfully record the process and results of economic activities of the enterprise. However, in order to artificially increase profits, some companies adopt practices that are not allowed by accounting standards and systems to recognize revenue or manufacturing revenue in advance. Specific methods include issuing invoices for sales in advance, recognizing revenue when there are significant uncertainties in the future, abusing the percentage completion method to recognise revenue, or not deferring revenue recognition when future services are still required. For example, some companies make a sale at the end of the year and then confirm a return at the beginning of the year for the purpose of inflating the profit of the year or turning the loss into a profit this year; and some companies use a subsidiary to make the goods at market prices Sell to a third party, confirm the sales revenue of the subsidiary, and then buy it back from a third-party company by another subsidiary, to avoid the internal constraints of the enterprise group must offset the prescribed constraints, to achieve the purpose of falsely increasing the income and profit of the consolidated statement of the enterprise group.

2. Understate expenses

Use fees as a "regulator" or "reservoir" of profits. Common method: treat the income expenditure as capital expenditure, defer the expenses that should be confirmed in the current period to the subsequent years, and recognize the potential losses. The asset loss of the resale is not resold in the current period, and the accrued expenses are not Withholding, the recognized asset impairment loss will not be recognized at the end of the period, and the value of inventories will be falsely increased, and the cost of resale will be reduced.

In addition, in the financial accounting statements of some listed companies in China, there are also ways to use falsely increased profits such as related party relationships, asset restructuring, debt restructuring, sales, transfers, asset replacement, tax relief and fiscal subsidies.

Financial Statement Harm

1. Make the company's financial situation in a vicious circle, eventually leading to bankruptcy

Due to early recognition of revenue or deferred recognition of expenses, on the one hand, potential losses are left for later periods, which need to be digested by subsequent periods to greatly reduce the potential for profit growth in the later period; on the other hand, the goal of upper-level profit management is to use the performance of the previous year as a base The formulations are generally increased when the tasks are assigned compared to the previous year, and it is becoming more and more difficult to realize profits. Facing the situation that the management target profit index is getting higher and higher, managers at all levels of subordinate units or companies, in order to show personal performance or be driven by other short-term goals, are more likely to falsify. Fraud is carried out year after year, the potential losses of the company are getting bigger and bigger, and the hidden dangers are getting more and more, which will eventually lead the company to go bankrupt. For example, in December 2001, Enron, a US energy trader that ranked seventh on the Fortune 500, increased its profit by US $ 591 million in the financial statements from 1997 to 2000, making the once brilliant Enron had no choice but to embark on the path of bankruptcy.

2. Make investors suffer huge losses and even lose their money

For example, a company in the United States misled investors due to a false increase in huge profits. After its fraud was exposed, investors confidence in the company collapsed, and the stock price fell from tens of dollars to tens of cents in a short period of time. Due to the careful planning of the company's senior management, Guangxia became a top blue chip company in China's listed companies by inflating huge profits. It was the top 50 listed companies in the past, and its earnings per share in 2000 were 0.827 yuan, which made the stock price from The share price of RMB 13.97 on March 30 and the resumption of power on December 29, 2000 reached RMB 75.98, a year-on-year increase of 440%, ranking second in Shenzhen and Shanghai. However, the good times did not last long. With the exposure of fraud and the myth of profiteering, its stock price suffered another 15 consecutive daily limit, from the high price of 30.77 yuan per share after ex-rights, to the high price of about 6 yuan, which caused investors to suffer. Great economic loss.

3. Make a crisis of trust in accounting firms

Enron's fraudulent financial statements were audited by Andersen Certified Public Accountants, one of the world's top five accounting firms. Due to the exposure of Enron's fraudulent financial statements, the reputation of Andersen was destroyed. Liability is also inevitable. It may face billions of dollars in claims, criminal charges, and a strong earthquake in the U.S. accounting community. CPAs are also caught in lawsuits, some of which have their business licenses revoked and some have been forced. Investigate criminal responsibility. For example, Shenzhen Zhongtianqin Certified Public Accountants, which is responsible for the financial audit of "Yinguangxia" company, also faces the same situation.

Financial statement precautions

1. Formulate realistic internal performance evaluation indicators

When formulating internal performance evaluation and short-term financial goals, the company's senior managers should conduct in-depth investigations, formulate and issue practicable profit budget indicators, so that they can be achieved and challenging; in formulating internal incentives and subordinates, The personnel promotion mechanism should be considered from a long-term perspective and comprehensively considered, and not based on the achievement of profit indicators as the sole criterion.

2. Strengthen the responsibility of internal audit

Internal audit is an audit performed on behalf of managers or the board of directors. Through the inspection and testing of internal auditors, it is possible to ascertain the operation of the internal control mechanism

Financial Statements

Whether it is good and whether the division of internal responsibilities is really implemented. Auditors can also visit the site in person or use temporary visits without notice to prevent the occurrence of fraud. They can also detect fraud by investigating facts and auditing books. Put forward management suggestions so that managers can get the relevant information in time and deal with it.

3. CPAs should follow general auditing standards and professional ethics

The purpose of the independent audit conducted by the CPA is to express opinions on the public financial reports of the trustees. However, they went to the scene to verify the report data and check the soundness of the internal control system, which helped to prevent fraud, and sometimes found fraud. Although in the routine audit, the CPA only issues opinions on whether the published financial statements of the trustees conform to the general accounting standards, and it is not necessary to disclose fraud. If the certified public accountant does not follow the general auditing standards and professional ethics during the audit, the accounting firm and the certified public accountant will not only bear the financial compensation liability, but also be subject to criminal liability. Users of financial statements are convinced that accounting firms are one of the few institutions that can recover economic losses for them. Especially when the audited unit is bankrupted and liquidated, statement users expect greater value from accounting firms. The firm is increasingly responsible for fraudulent financial statements. CPAs should follow the general auditing standards, perform necessary auditing procedures, and abide by professional ethics in the audit of financial statements to avoid the risk of fraud in financial statements.