F17 MGAB01 The Role that Has Been Assigned to the Accountant and the Users of the Report

CASE Analysis
Name
Institution
Introduction
The Role that Has Been Assigned to the Accountant and the Users of the Report
It is accountants who will be playing the role of a CFO in providing advice to the B&J Moving Limited concerning the appropriate accounting policies, the right internal control, and also the preparation of financial statement as well as reporting for the first fiscal year end. The information provided will be useful to the different users that might find the information useful for them. Some of the users that would require the information provided include the Owners, Royal Bank, Suppliers, Customers and the Future Investors (University of Toronto, 2017).
Users and Objectives
Owners
The report provided will enable the owners to ensure that there is continued success and growth of the B&J Moving Limited. The financial statement will enable the owners to understand the true financial and economic situation of the company so as to track performance; biasness to reflect the strong liquidity and also the solvency to indicate to the Royal Bank their ability to pay back any amount of loan. Brig and Jon who are the owners would wish to take the company to public in two years, to ensure that the company performed continuously well and also to show that there would proper return on investment. Although the owners of the business might be having proper knowledge about the business, but one thing for a fact is that they lack necessary accounting knowledge and even proper internal control; therefore they have over relied on the Accountant acting as the CFO to ensure that financial reporting procedures are adhered to (University of Toronto, 2017).
The Royal Bank
The bank would require the information so that they can assess the ability of the company to pay the bank loan and they are also in need of the report to enable them determine if the BJM Company is capable of complying with the bank covenants. The bank also needs the financial statement to be in prepared in accordance to with an appropriate standard to enable them to compare the performance of the company with other companies that are operating within the same industry. Other than the bank and the owners, who would find the information from the report quite useful; include the suppliers, customers, and even the future possible investors (University of Toronto, 2017).
Constraints
B&J Moving Limited being private company, it has got the option to either adopt IFRS or ASPE. More often than not privately owned companies would adopt IFRS and also the company is planning to go public in the next two years time. The ratio of Debt to Equity ought not to be more than in form of 1 to 1 and the bank should also be provided with a proper audited financial statement (University of Toronto, 2017).
Case Response (Issue/Analysis/Recommendation)
Cash against Accrual Basis of Accounting
Cash and accrual basis are different two procedures applied in recording dealings of accounting. Major dissimilarity between these two procedures of accounting is about timing for recording these transactions. However, when aggregated over a certain period of time, then it would be discovered that these methods are approximately the same. When it comes ...