Financial Reporting Issues in an Organisation

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But unfortunately, Samsung Gadgets announced a seventh straight year-on-year fall in quarter’s operating profit.

Benefits rose 15 per cent from the first quarter. One component keeping down interest for the new gadget has been the favour of the rival iPhone 6.

2) The declining sales had implied Samsung to come back to the semiconductor division. Samsung is a considerable pioneer over its associates in memory chip innovation.

Lee Seung-woo, an analyst with IBK Securities had remarked that Samsung would see a lift in the second half of the year from an agreement to deliver processor chips for Apple's next iPhone.

3) Additionally, Yu, A chief product officer likewise remarked on Samsung's new system of lower-and mid-level cell phones, this procedure was taken after to exploit economies of scale and expand margins for phones.

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Samsung’s Future Projects:

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- By 2020, Samsung goals to accomplish annual revenue of USD 400 billion and successfully list in the world’s top 5 brands. Three vital strategies adopted by Samsung are: 'Imagination ', "Organization" and 'Incredible People'.

- BK Yoon, one of the CEO discussed about the Internet of Things. “The Internet of Things is a term used to describe everyday objects that are connected to the internet that can communicate with one another through sensors”. Additionally 5 years from now 100% of the gadgets would consider this trend.

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Pitfalls Of Using Financial Data

1) Market Patterns

One disservice of utilizing budgetary proclamations for choice making is that the data and figures depend available at that given time. Since an association has sold 5 million duplicates of a thing in the midst of a year does not assure it will offer the the very aggregate or more. It might offer altogether less if a contender releases a practically identical thing.

For example, launch of a new apple device will result in the sales of Samsung devices to drop down and this may result in the decrease of the value of financial statements.

2) Not useful for planning

Since financial statements are readied by utilizing recorded money related information, subsequently, the data got from these statements might not be compelling in organizational planning.

3) At-One-Time vs. Continuous Analysis

One financial statement shows the performance of an organization only at a single point of time. Money related explanation does not indicate if the organization is improving or more terrible than the year before.

Example: If administrators settle on future decisions using financial statements, they should use a couple cash related clarifications from earlier months and years to make sure they get a general depiction of how much the association is executing. The money related explanation turns into a continuous analysis, which compared to the use of a single statement is more significant.

4) Qualitative aspects

Financial statement analysis provides only quantitative information about the company's financial venture. In any case, it is unsuccessful in delivering subjective information, for example administration work connection, consumer loyalty's, administration's aptitudes et cetera which are equally vital for choice making.

5) Comparison not possible

The financial statements are based on historical data. Therefore comparative analysis of financial statements of diverse years should not be possible as inflation distorts the perspective introduced by the of statements distinctive years. ________________________________________________________________________________

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Quality Of Reporting Information

These are the qualities which can be seen in the Reporting Information of Samsung:

- Relevance

Information can be called useful only when the data collected are applicable to decision making needs of the user by playing the role of assessing the past, present and future to verify as well as rectify their assessments. In order to predict the future financial position of the entity, the current financial position and past performances are used as basis of assessment.

For instance, if unordinary, unusual and occasional things of income or expense are independently unveiled, the prescient estimations of the income statement will be upgraded.

- Timeliness

Lose of relevance occurs due to set back in the reporting of information. Before knowing all characteristics of a transaction, it is reported to present information on time. This damages the reliability but alternately, if reporting is hindered till all characteristics are known, even though it increases the reliability, it’ll be of small-scale use to the users as they must have already made their decisions in the meantime.

- Neutrality

Financial statements are considered neutral when the information contained are bias free and when it doesn’t influence the judgment to obtain a predetermined result.

- Faithful representation

Information concerning the transactions and other affairs must be presented faithfully to the users for the data to be reliable.

Example; “A balance sheet should represent faithfully the transactions and other events that result in assets, liabilities and equity of the entity at the reporting date which meet the recognition criteria.” (ifrs.org, 2015)

- Reliability

Significant information can also be unreliable through misleading representation of its recognition.

For