iwant aims and objective of final account

The Final Accounts

In a practical sense, the main purpose of financial accounting is to accurately prepare the final accounts, also known as financial statements. The three main financial accounts are the income statement, the balance sheet and the statement of cash flows.Companies initially began to provide such accounts to provide important information to their shareholders and creditors of loans. Without reliable information, it is much riskier to give capital to a business. In turn, lenders and shareholders compare final accounts between different companies to look for better prospects.

The Objectives of the Financial Statements

In 1973, the American Institute of Certified Public Accountants, or AICPA, published a study entitled "The Objectives of Financial Statements." The study concluded that financial statements were primarily useful in helping multiple parties make economic decisions.

The AICPA further described financial accounting as the appropriate method for delivering final accounts. The final accounts were mainly intended for those with limited access to information about a particular company.

Financial Reporting Standards

In the United States, financial reporting standards are set by the Financial Accounting Standards Board, or FASB. The FASB is contracted by the Securities and Exchange Commission, or SEC, to control approved methods and applications of financial accounting.

Financial accounting is usually done by those who have studied the concepts, history and laws related to their practice. In the United States, these individuals are referred to as certified public accountants, or CPAs.