Case Scenario Role of financial information is very important in order to satisfy the information needs of different stakeholders from inside and outside the organization. The way the information is presented is also crucial as it is the only source of information for the external stakeholders to know the financial health of the organization. Presenting financial information in an appropriate manner is important as it allows users taking correct decisions on the financial position, the results of economic and financial activity and the changes in the financial position of the company. Tech telecom is a telecommunication company providing telecommunication services to wide range of Govt and private organisations. Company is owned by Mr. Shihab. There are approximately 100 people working in the company in different locations The company provides support services to govt telecommunication authority to fix the broadband, fixed line connections and spreading the telecommunication lines in different areas. The company has started expanding as the demand for internet services has increased in the rural areas due to Pandemic as companies are following work from home culture. Company has appointed new management Accountant Mr. Salim. His task includes providing information to management , preparation of annual budget, producing the monthly management accounts. Company Operations Previously Company was providing services in urban areas only, but its operations are increasing in rural areas also. The management is focusing more on investing in resources but is also concerned about the efficient and effective use of resources. As the demand of experienced technical experts has increased and company has appointed new professionals to cater the increased demand in rural areas. Financial Information Mr. Shihab was not concerned about maintaining accounts and had not insisted on proper book of accounts Financial accounts were prepared by a junior accountant in the past who was working on parttime basis. He was maintaining the documents such as invoices, receipts, and bank statements from which following information were extracted for the year ended 31/03/2020 and 31/3/2021 Description Salaries Administration expenses Advertising expenses Distribution expenses Land and Building Furnitures & Fittings Account Payable Bank Overdraft Accrued wages Prepaid Rent Cash Closing Stock Account Receivable Sales Revenue Cost of Goods sold Interest Paid Tax Paid Equity Capital Retain earning 31-3-2021 OMR 20,000 12,000 3,000 10,000 30,000 25,000 8,000 10,000 12,000 3,000 10,000 8,000 25,000 100,000 35,000 8,000 7,000 ??? 30,000 31-3-2020 OMR 13,000 10,000 3,000 7.000 20,000 15,000 10,000 2,000 5,000 5,000 15,000 10.000 15.000 60,000 27,000 8.000 5,000 120.000 50,000 Business Opportunities. As company's operations have increased Mr. Shihab is interested to understand more about keeping the proper financial records. He is planning to invest further in the business and approached few banks and investors requesting funds for the purpose of expanding the business. He understands that the banks and potential investors will demand to present the audited financial statements which were not maintained in the past. Mr. Shihab has requested Mr. Salim (New Management Accountant) to help him in understanding the critical importance of accounting information in the viewpoint of different stakeholders of the company and need for structured presentation of accounting information using financial statements. Requirement: Prepare a report to be presented to the owner Mr. Shihab of Tech Telecom at the next meeting by critically evaluating financial information supported by effective and appropriate judgements. Distinction Di Critically evaluate financial information supported by effective and appropriate judgements'. Case Scenario Role of financial information is very important in order to satisfy the information needs of different stakeholders from inside and outside the organization. The way the information is presented is also crucial as it is the only source of information for the external stakeholders to know the financial health of the organization. Presenting financial information in an appropriate manner is important as it allows users taking correct decisions on the financial position, the results of economic and financial activity and the changes in the financial position of the company. Tech telecom is a telecommunication company providing telecommunication services to wide range of Govt and private organisations. Company is owned by Mr. Shihab. There are approximately 100 people working in the company in different locations The company provides support services to govt telecommunication authority to fix the broadband, fixed line connections and spreading the telecommunication lines in different areas. The company has started expanding as the demand for internet services has increased in the rural areas due to Pandemic as companies are following work from home culture. Company has appointed new management Accountant Mr. Salim. His task includes providing information to management , preparation of annual budget, producing the monthly management accounts. Company Operations Previously Company was providing services in urban areas only, but its operations are increasing in rural areas also. The management is focusing more on investing in resources but is also concerned about the efficient and effective use of resources. As the demand of experienced technical experts has increased and company has appointed new professionals to cater the increased demand in rural areas. Financial Information Mr. Shihab was not concerned about maintaining accounts and had not insisted on proper book of accounts Financial accounts were prepared by a junior accountant in the past who was working on parttime basis. He was maintaining the documents such as invoices, receipts, and bank statements from which following information were extracted for the year ended 31/03/2020 and 31/3/2021 Description Salaries Administration expenses Advertising expenses Distribution expenses Land and Building Furnitures & Fittings Account Payable Bank Overdraft Accrued wages Prepaid Rent Cash Closing Stock Account Receivable Sales Revenue Cost of Goods sold Interest Paid Tax Paid Equity Capital Retain earning 31-3-2021 OMR 20,000 12,000 3,000 10,000 30,000 25,000 8,000 10,000 12,000 3,000 10,000 8,000 25,000 100,000 35,000 8,000 7,000 ??? 30,000 31-3-2020 OMR 13,000 10,000 3,000 7.000 20,000 15,000 10,000 2,000 5,000 5,000 15,000 10.000 15.000 60,000 27,000 8.000 5,000 120.000 50,000 Business Opportunities. As company's operations have increased Mr. Shihab is interested to understand more about keeping the proper financial records. He is planning to invest further in the business and approached few banks and investors requesting funds for the purpose of expanding the business. He understands that the banks and potential investors will demand to present the audited financial statements which were not maintained in the past. Mr. Shihab has requested Mr. Salim (New Management Accountant) to help him in understanding the critical importance of accounting information in the viewpoint of different stakeholders of the company and need for structured presentation of accounting information using financial statements. Requirement: Prepare a report to be presented to the owner Mr. Shihab of Tech Telecom at the next meeting by critically evaluating financial information supported by effective and appropriate judgements. Distinction Di Critically evaluate financial information supported by effective and appropriate judgements