1. © Pearson Education Limited 2003 Atrill, McLaney: Accounting and Finance for Non-Specialists, 4th edition OHT 1.1 Introduction to accounting and finance OBJECTIVES You should be able to: Identify the main users of financial information and discuss their needs Explain the nature and roles of accounting and finance Explain why an understanding of accounting and finance is likely to be relevant to your needs Distinguish between financial and management accounting

2. © Pearson Education Limited 2003 Atrill, McLaney: Accounting and Finance for Non-Specialists, 4th edition OHT 1.2 Business organisation Competitors Lenders Managers Owners Customers Suppliers Investment analysts Community representatives Government Employees and their representatives Main users of financial information relating to a business organisation

3. © Pearson Education Limited 2003 Atrill, McLaney: Accounting and Finance for Non-Specialists, 4th edition OHT 1.3 The characteristics that influence the usefulness of accounting information Characteristics that make financial information useful Understandability Comparability ReliabilityRelevance Limitation to the application of the qualitative characteristics Cost/Benefit Necessary for including information in the financial statements Materiality

4. © Pearson Education Limited 2003 Atrill, McLaney: Accounting and Finance for Non-Specialists, 4th edition OHT 1.4 Information analysis Information identification Information reporting Information recording The accounting information system

5. © Pearson Education Limited 2003 Atrill, McLaney: Accounting and Finance for Non-Specialists, 4th edition OHT 1.5 The planning and control process Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Identify business objectives Consider options Prepare a long-term plan based on the most appropriate option(s) Prepare short-term plans (budgets) Perform and collect information on actual performance Respond to divergences between plans and actuals, and exercise control Revise plans (and budgets) if necessary

6. © Pearson Education Limited 2003 Atrill, McLaney: Accounting and Finance for Non-Specialists, 4th edition OHT 1.6 Financial and management accounting Nature of the reports produced Level of detail The existence of regulations Reporting interval Time horizon Range and quality of information The major differences concern: