Unit 13: Financial Reporting
Unit code K/508/0526
Unit level 5
Credit value 15
The overall aim of this unit
is to develop the knowledge, understanding and skills which are required in the preparation of financial statements. Students will become aware of the appropriate financial standards which influence and inform the production of financial
statements. They will also explore
the conceptual frameworks for financial reporting and how they are related to the reporting of financial
On successful completion of this unit students will be in a position
to prepare, analyse and audit financial statements in a workplace context and be able to assist senior colleagues in the interpretation of complex financial
information. In addition,
students will have the fundamental knowledge and skills
to progress on to a higher level
By the end of this unit a
student will be able to:
- Analyse the context
and purpose of financial reporting.
- Interpret financial statements.
- Evaluate financial reporting standards and theoretical models and concepts.
- Evaluate international differences in financial reporting.
LO1 Analyse the context
and purpose of financial reporting
Context of financial reporting:
Complying with regulatory
The governance of financial
reporting including duties and responsibilities of responsible officers.
Purpose of financial reporting:
Meeting user expectations
Ensuring all organisations
comply with the same rules and standards. Seeking funding/investment.
Predicting future financial
positions and cash flow.
LO2 Interpret financial
Importance and purpose of analysing financial statements:
Using financial statements to communicate financial positions with
include, but not limited to,
the use of liquidity ratios,
ROI, WACC and debtor periods to determine financial positions.
Cash flow, profit and loss and balance sheets:
Considering how to use cash flow
statements to monitor
inflows and outflows
Using the profit and
loss account to summarise the financial performance of an organisation in a given time period.
Using a balance sheet as a
snapshot of an organisation’s position regarding assets and liabilities.
LO3 Evaluate financial
reporting standards and theoretical models and concepts
Financial reporting standards:
As a common global
How does it facilitate understanding of financial
matters across international boundaries?
Differences between International
Accounting Standards (IAS) and the International
Financial Reporting Standards (IFRS).
Role and use of IFRS:
Benefits to organisations,
governments, investors and other key stakeholders.
nations which adopt
the IFRS and
how this is advantageous and/or disadvantageous.
Theories, models and concepts:
Models of reporting and
models for auditing.
LO4 Evaluate international
differences in financial reporting
Different financial reporting principles in relation to international companies.
differences before the IFRS and how countries have responded to the IFRS.
differences in external financial reporting and factors that influence differences.
Learning Outcomes and
LO1 Analyse the
context and purpose of financial reporting
D1 Critically analyse the different regulatory frameworks
and governance of financial reporting for specific stakeholders.
P1 Analyse the context of financial
reporting including regulatory frameworks and governance of financial reporting.
P2 Analyse the purpose of financial
reporting for meeting organisational
objectives, development and growth.
M1 Appraise the context and purpose of financial reporting in meeting stakeholder needs and expectations.
LO2 Interpret financial
D2 Using appropriate theories and models suggest how
organisations can effectively respond to existing and potential financial
P3 Interpret profit and loss, cash flow and balance statements
P4 Calculate and present financial ratios for organisational performance
M2 Interpret results of
financial ratios of performance and financial status, and investor ratios for users of financial statements to inform decision-making.
LO3 Evaluate financial reporting standards and theoretical
models and concepts
P5 Explain the benefits of International
Accounting Standards (IAS) and International Financial Reporting Standards (IFRS).
P6 Evaluate the models
of financial reporting and
M3 Critically evaluate financial reporting and auditing through the
coherent application of theories and models
to support judgements and conclusions.
D3 Critically evaluate the application
of IFRS in application to specific countries and differences in financial
reporting based on models and theories.
LO4 Evaluate international differences in financial reporting
P7 Evaluate the
differences and importance of financial
reporting across different countries.
M4 Critically evaluate
the factors that influence international differences in financial reporting.