Accountingcreates a „quite particular visibility in the organisation, making thingsvisible that otherwise would not be. It can influence perceptions, change languageand infuse dialogue, thereby permeating the ways in which prioritets, concerns andworries, and new possibilities for action are expressed.“The objective of general purposefinancial reportingis to provide financialinformation about the reporting entity, that is useful to existing and potencialinvestors, lenders and other creditors in making decisions about providing resourcesto the entity.Key elements of financial statementaccording to IFRS :Statement of financial position (balance sheet) : shows what the firm own(=assets) and where the means to finance these assets come from (equity,liabilities)Income statement and statement of comprehensive income : shows therevenues and expenses incurred during the period and the resulting incomeStatement of changes in equity : shows how and why total equity changedfrom the beginning of the period to the endCash flow statement : shows cash flows for investment activities, financingactivities, and operational activitiesExplanatory notesManagement accountingmeasures and reports financial information as well asother type of information that are intended primarily to assist managers in fulfilling thegoals of the organisation. Management accounting – for internal purposes, for theevery day work in the firm.Control problem and the typical control cycle:Problems of motivationProblems of direction or informationProblems of abilityThe controllersomehow gives direct information like the traffic light which says go ordon't go, but he can also be more like a round about.In adivisionalstructure, one can usually find bothcorporate controllersandbusiness unit controllers.In afunctional structure, one can usually findfinancial controllerswithin thefinance (and admin) function andspecialised controllersin the other areas.
Conception of controlWhat is the basis approach to management : in the late 19 century the conception ofcontrol was direct. The main goal was to be better then the competitors in terms ofhaving higher sales. In this period of time there haven'tbeen many marketregulations. The problem is, that the state wanted to have competition, becausecompetition makes fair prices etc. Because of the market regulations that have beenintroduced, firms could not continue the direct conception of control. Thats why theystartedthe manufacturing conception of control (1915 – 1925, in the U.S.).Firmsstarted to integrate vertically. For a stable production firms wanted to control thewhole value chain. As they had a stable productions and lots of goods to sell, they