All companies should maintain and keep their financial records to ensure they understand how they are doing. There are some types of companies that need to create and maintain these records for the purposes of preparing and lodging financial reports to fulfill statutory obligations. Generally, the companies that are required to lodge financial statements and reports are the companies in which the general public has invested funds, or there are substantial sum of money involved in the company, or the company exists for charitable purposes with no intentions to make profit.
The principle objective of these statements should be to provide essential financial information which is useful or relevant to the needs of various users. While providing this information, the statements should consist of – cost of operations, revenue earnings of an undertaking over the reporting period as well as the preceding period
All financial statements must provide a fair and true view of events, situations they purport to describe. All financial statements must be relevant and factual. The Guidelines require financial statements to be historical records which show the financial positions of undertakings at a point in time and the manner in which this has changed since previously reported upon.