The five principles of financial reporting (ACCURACY,

The five principles of financial reporting (ACCURACY, CONSISTENCY, APPEARANCE,EFFICIENCY, and USABILITY, with occasional overlap between them) are discussed in detailbelow. Your assignment is to edit the provided base spreadsheet report to ensure that all fiveprinciples of financial reporting are executed well in the final submitted version. The basereport, generated using Microsoft Excel, was issued by an internal service center responsible forsupplying paper to various departments in a large organization. Determining that this financialreport has problems is a critical first step, but understanding the specific nature of the reportingproblems is important to producing higher quality financial reports in the future.

The accuracy principle involves ensuring that the content of a financial report properlyrepresents what it purports to represent. It involves, for example, ensuring that the writtencomponents and titles / labels in the reporting are free from spelling and grammatical errors, andthat the data presented is associated with the time period(s) indicated. It should also involveensuring that the titles and descriptions that are included in the financial reporting are consistentwith the actual amounts that are included in the financial reporting. For example, an amountreported as wages expense on a report should in fact be the amount of wages expense for the periodand not some other expense. And, of course, the amounts need to be accurate, with recognitionthat accounting requires judgment and estimation. While financial report amounts might not oftenmatch exactly the true amount (that often cannot be known exactly until sometime in the future),they should be verifiable against standard data sources to be considered accurate. Please addressthe accuracy issues in the report now.

The consistency principle involves ensuring that the format and layout of a financial reportare similar to prior issuances of the same report and/or other reports issued by the same department.In many organizations, certain individuals or departments (such as the CFO or the board ofdirectors) will receive many different financial reports each period. Having a consistent (and, incertain cases, distinctive) format or “feel” for each report or for each issuing department will allowthe recipient to quickly identify a needed report for a specific related decision. Consistency alsoinvolves ensuring that titles and descriptions remain the same from one period to the next, so thatrecipients know that the same financial information is being reported. (Changing a column or rowlabel, even slightly, could lead a recipient to question whether something different is now beingreported.) Fonts and other format attributes should also be consistent to be in compliance with theprinciple. In this case, the Chief Legal Officer directs the Legal Services department, and theManufacturing Manager directs the Operations department. Please address the consistency issuesin the report now.

The appearance principle involves ensuring that the financial report is aestheticallypleasing but also professional. (Accounting is an art that uses a science!) Aesthetically pleasingfinancial reports should include proper alignments and make appropriate use of white space,borders, shading, and color. The purpose of most financial reports is to support decision making,and improving the appearance of the report can often help to draw the attention of the recipientdecision maker to the most relevant data items (and can avoid distracting the recipient). Forexample, inserting a blank row above and/or double-underlining a very important financialstatement amount naturally attracts the gaze of the reader. Please improve the appearance of thereport now.

The efficiency principle involves ensuring that a standard financial report can be preparedas quickly and easily as possible. This principle often involves utilizing automated or formulaicfields where possible. This will help to minimize the data entry and computations necessary forthe preparation of financial reports. Hard-wired numerical totals should be avoided. If possible,building financial reports to extract data directly from the underlying accounting system, both forlabels and amounts, can create the greatest efficiency. And efficiency should relate not only to thepreparation of financial reports but also the use of financial reports, where helping to ensure thatrelevant decisions are efficiently supported is important. In this case, the purpose for the financialreport is for the internal service center to request reimbursement for the paper provided to eachconsumer group. The letter size (8 ½ x 11) reams cost $8 each, the legal size (8 ½ x 14) reamscost $10 each, the bond stock (24-lb) reams cost $12 each, the stationery (32-lb) reams cost $12each, the form stock (40-lb) reams cost $15 each, and the card stock (80-lb) reams cost $20 each.A ream includes 500 sheets for printer, legal, and bond stock, but a ream is only 250 sheets forstationery, form stock, and card stock. Try to increase the efficiency of the report now.
The usability principle relates very specifically to decision support for the report recipients.It involves considering how the financial report will be disseminated. In that regard, financialreport data should be organized to allow for ease of extraction by recipients. It should also be easilyunderstandable given the specific background(s) of the recipients. And financial reports should beformatted for duplication, where appropriate, or for posting to websites (to be accessible using avariety of electronic devices and a variety of internet browsers). For example, whereas use ofshading and color may be deemed worthwhile to improve the appearance of a financial report, itmight make the report less suited for duplication. Make your finishing touches involving usabilitynow.
Summary and Conclusion
While reporting style preferences will vary, and financial reports will not generally be perfect,greater attention to these principles should allow accounting professionals to improve the quality of reporting.

After you understand the objectives of the report and the five principles, work on improving the following base spreadsheet.

Project 2 Base Spreadsheet 2021.xlsx Download Project 2 Base Spreadsheet 2021.xlsx

Second Document: It is done in excel

Acme Organziation
Report of Paper Consumption
For the Month Ended November 30, 2021
Paper Type and Reams Consumed
Paper Consumer Std 8 1/2 x 11 Std 8 1/2 x 14 24-lb 32-lb 40-lb 80-lb
General Accounting 21 0 5 2 3 1
Sales and Marekting 55 2 30 25 18 43
Executive Administration 16 2 12 5 1 0
Chief Legal Officer 5 40 1 0 0 2
Billing and Receivables 6 1 0 30 2 0
Manufacturing Manager 8 0 1 0 0 2
Total 111 38 49 62 24 48