You are the accountant for a large proprietary company and have advised the CEO that to comply with accounting standards, the company is required to prepare a statement of financial position. The CEO questions the usefulness of the statement as he has stated that all he needs to know is if the company, has made a profit and the balance of his bank account.

Required:

Prepare a response to the CEO in the format of an email discussing the purpose and any limitations of the statement of financial position. Your response should be referenced where appropriate (APA style). (20 Marks)