Essay Examples on Oregon Institute of Technology

Depict the entity's overall financial Health

The information found within the primary financial statements of an organization can be used to depict the entity's overall financial health Hermanson Edwards and Maher 2015 indicate that this financial information is useful to both internal and external parties Internally the management team can utilize this information to make better decisions in the future knowing the financial impact of previous actions Externally financial statements are utilized to gauge investment related decisions by both current and potential stockholders Naturally the data within the financial statements can sway the decisions of both parties Without regulation to the reporting practices the information found within these statements can be intentionally and unintentionally misleading As a result there is a genuine need for regulation standardization and control for organizations that report their financial data This lack of regulation in the financial reporting process was exposed by the numerous accounting scandals uncovered in and around the early 2000s To increase control and to provide a level of regulation to financial reporting the Sarbanes Oxley SOX Act was instituted Bainbridge 2007 Bainbridge notes that a highly contested part of SOX is section 404 which primarily focuses on creating assessing and implementing internal controls for the financial reporting process 

1 pages | 396 words