Enron Financial Statement Case Essay

Accounting is all about fiscal information capturing it, recording it, configuring it, analyzing it, and propounding it to persons who use it. The financial statements The final product of financial accounting is in the form of financial statements that are packaged with different information in a financial report. Financial statements are prepared at the end of individually accounting period. A period maybe one month, one quarter, or one year. Financial statements report summary amounts, or totals.There are three main financial statements The residual sheet containing Assets and extraction of Assets at a specific date The income statement representing is the all-important financial statement that summarizes the profit-making activities of a rail line over a period of time. The Cash flow statement presents a summary of the businesss sources and uses of cash during the income statement period. Financial Report Financial Report Form Financial Report moldiness be prepared accordi ng to the Standards of GAAP generally accepted accounting principles for preparing the financial statements, these rules permit preference accounting methods for some transactions. Furthermore, accountants have to interpret the rules as they apply GAAP in actual situations. The devil is in the details. The point is that interpreting GAAP is not cut-and-dried. Many accounting standards leave a hatch of wiggle room for interpretation. Deciding how to account for certain transactions and situations requires seasoned judgment and careful depth psychology of the rules. Furthermore, many estimates have to be made. Financial Report main componentsThe three basic financial statements income statement, balance sheet, and statement of cash flows. A statement of changes in owners equity (if needed). Disclosures mainly containing Footnotes and the most important walker is the one which identify the major accounting policies and methods that the business uses and justifying any change in th e policy used. strong-minded auditors report must be done by independent (from the firm) licensed auditor and give the business a clean bill of health, or that the report is misleading and should not be relied upon. This negative, disapproving audit report is called an adverse opinion.