Financial Management: Star Ltd

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Task A

A. Email for Advice

Hi Ron,

As a Finance Manager of Star Ltd., this email is sent to acknowledge the receipt of financial statements (Income Statement 2019, Balance Sheet 2019, and Other Financial Information for 2018) of Star Ltd. from Quad Accountants (External Accountants) and the auditors of Star Ltd. However, for further analysis to be conducted on the given information, it is essential to highlight the importance of accuracy and reliability of the received financial statements. 

Accurate financial statements are essential for the managers because it allows investors, creditors, auditors and management have to assess the financial health and performance of the company based on the provided information (Freeman & Freeman, 2015). For checking the accuracy of transactions and events, it is vital to ensure that the transactions and other financial information related to events have been recorded appropriately, starting from journal entries till final accounts. Reconciliation of internal records with external records like supplier invoices, bank statements, credit card statements, and documents can provide the accuracy of data for Star Ltd (Barnes, 2010). Cash and non-cash expenses must also be reviewed, and it should be ensured that the non-cash expenses are adjusted for in the cash flow statement. In order to prevent fraudulent activities and ensure the accuracy of financial statements, Star Ltd (Jacobson & Boyle, 2003). must design the transaction registers and journals along with making purchases of reliable accounting software. 

Accounting reliability refers to whether the financial information recorded in the given period can be verified and used by investors and creditors consistently (Jacobson & Boyle, 2003). It puts light on the trustworthiness of the financial statements. Reliability can be ensured if the financial transactions recorded in the financial statements can be checked, tracked, reviewed, and verified by the concerned persons with objective evidence and connected activities (Barnes, 2010). By improving the internal control functions, Star Ltd. can ensure that its financial statements and financial transactions are reliable. Web-based accounting software and strict internal control policies can increase the reliability of the financial statements that can further be used for decision-making processes (Freeman & Freeman, 2015). Star Ltd. should ensure that the company is following accounting standards and corporate governance framework so that the reliability and transparency of the financial statements can be upheld. 

In order to get insights on buying accounting packages or following accounting standards, the help of external accountants and the agencies can be taken. For any further suggestions or recommendations, please send queries. 

Thanks and Best Wishes

Financial Accountant Manager. 

Star Ltd. 

B. Comparison

Upon comparison of income statement provided by the Star Ltd. management and Quad Accountants, no discrepancies were found. Moreover, the balance sheet accounts were also verified from the external accounts provided by Quad Accountants. Upon complete comparison, no variations were found in assets, liabilities, and equity accounts of Star Ltd. It means that the data provided and recorded by Star Ltd. is reasonably accurate and reliable.

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