Financial Reporting

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Financial statements are the ultimate report card of a company’s fiscal performance. They enable owners and managers to pursue their business objectives, whether they are raising capital, acquisition, divestment or restructure. Therefore, every activity, through the business’s lifecycle, impacts the financial statements and hence needs to be carefully examined and analyzed.

Financial reporting refers to the process of disclosing financial information by companies to various stakeholders, including shareholders, regulators, and the general public. Financial reporting in India is governed by various laws and regulations, including the Companies Act, 2013, the Securities and Exchange Board of India (SEBI) regulations, and the Indian Accounting Standards (Ind AS) issued by the Institute of Chartered Accountants of India (ICAI). These laws and regulations specify the requirements for financial reporting by companies, including the format and content of financial statements, the disclosure of related party transactions, and the presentation of non-financial information, such as environmental, social, and governance (ESG) factors.

The object of financial reporting in India is to promote transparency, accountability, and integrity in corporate reporting, and to ensure that stakeholders have access to reliable and meaningful financial information. This enables stakeholders to evaluate a company’s financial health and make informed decisions regarding their investment, lending, or other transactions with the company. Financial reporting also helps to promote confidence in the Indian capital markets, which is essential for the country’s economic growth and development.

Chartered Accountancy (CA) firms play a significant role in financial reporting in India. They are entrusted with the responsibility of providing assurance on the financial statements of companies and ensuring compliance with the relevant laws and regulations.

How Can MNRS Help?

Since the objective of financial reporting is to provide relevant, accurate, and timely information about a company’s financial position, performance, and cash flows to enable informed decision-making by users of financial statements, we being a CA firm can contribute significantly in achieving that object. We deliver a range of services designed to help both established and growing businesses navigate the complications associated with accounting and financial reporting. Some of the key roles our firm plays in financial reporting are as follows:

  • Audit of Financial Statements: We conduct an audit of the financial statements of companies to provide an independent and objective opinion on their accuracy and completeness. This involves examining the company’s financial records, internal controls, and other relevant information to ensure that the financial statements are free from material misstatements.
  • Compliance with Accounting Standards: Our firm help companies in complying with the accounting standards issued by the ICAI, which are mandatory for companies in India. These standards specify the accounting policies and practices that companies should follow while preparing their financial statements.
  • Advisory Services: We provide advisory services to companies on various financial matters, such as taxation, mergers and acquisitions, and corporate finance. They also provide guidance on the implementation of new accounting standards and regulations.
  • Certification of Various Reports: Being a CA firm, we are authorized to certify various reports required under the Companies Act, such as the annual return, the secretarial audit report, and the cost audit report. We also issue our reports and certificates on various matters, which only a competent CA firm is qualified to issue/certify.
  • Internal Control Review: For effective Financial Reporting, correctness and timely compilation of information is a must, which can be achieved only through an effective internal control system. During our engagement we also review the internal controls of companies to ensure that they are robust and effective in mitigating the risk of financial fraud or misstatements.
  • Our engagement results in significant reduction in stress on inhouse team of our clients, which enable them to on what matters most for the growth and continuity of their business.
  • We also offer advice and support on accounting for financial instruments using our in-house team of experts within our Financial Services Advisory practice.
  • Our team also apprise businesses with the newly introduced and ongoing requirements of accounting standards by assisting with the impact analysis, building models to provide the calculations and journals and making best use of available practical expedients.