財務報告相關資料(英文版)(doc33頁)(正式版)

1、1Record to ReportThe Executive Board is responsible for the conduct, operational and financial performance of an organisation. These responsibilities are discharged by:clearly stating the short and long term objectives of the organisation;clearly stating the policy guidelines within which they expec

2、t management to operate;defining the system for ensuring that management acts in accordance with the Boards direction; anddefining procedures for measuring the extent to which progress towards corporate objectives is being achieved.1.1The value of informationIn order for the Board to be able to func

3、tion effectively, information is key. A Board which operates with insufficient or inaccurate information will be unable to monitor the organisation effectively with decision making being based on flawed data. Under this scenario, there is a significant risk that the organisation will fail to meet it

4、s long term objectives.Post Enron, Qwest, WorldCom etc Executive Boards cannot fail to appreciate that their reporting impacts not only on the performance and future of their own organisation, but capital markets as a whole.High quality, transparent reporting which is based on relevant financial and

5、 non-financial value drivers is critical for driving corporate performance as well restoring confidence in the markets. The first step towards achieving this is to implement a framework of management reporting which is based on timely, relevant and accurate information. This will enable effective de

6、cision making as well as meeting the needs of external stakeholders.1.2Scope of Record to ReportThe scope of this paper is the financial and non-financial reporting responsibilities of the CFO/ FD. As such it covers:Section 2: Board/ Divisional/ cost centre reporting (along with application of Busin

7、ess Intelligence techniques)Section 3: General ledger and the chart of accounts structureSection 4: Month end close and consolidation processesSection 5: Statutory reportingThe paper does not cover the reporting responsibilities of other Operational Executives (eg. Sales, Logistics, CRM, Marketing,

8、HR etc).2Management reporting2.1The purpose of management informationThe purpose of management information is to:monitor progress against corporate objectives and plansidentify actions required where actual performance is at variance with expectationThe Board Report is a key component in the managem

9、ent reporting hierarchy, collating information across an organisation. The Board Report combines the various operational activities through the common and objective medium of finance (be it sterling, dollars etc). A good Board Report will ultimately drive decision making and actions, assisting the o

10、rganisation to achieve its short-term and long term objectives.As such the Board Report should provide all the necessary information to support the Board in fulfilling its responsibilities. In doing so it should be:Externally focusedMarket opportunitiesThreatsCompetitionForward lookingDriving vision

11、Aligning operations to strategyRefining strategy as requiredChallenging to the management teamDriving performanceQuestioning the status quoUnderstanding and managing risks2.2Management reporting & operational reportingManagement reporting is a broad term which may mean different things to different

12、people. It is, therefore, necessary to understand the distinction between:management reporting as used by key Executives and senior management. These reports are used to drive decision making and measure whether or not corporate objectives are being met. This type of reporting needs to be salient, r

13、elevant, covering both financial and non financial criteriamanagement reporting as used for day to day operational purposes. Examples include cost centre reports, headcount analysis, call centre performance etc. These reports are data driven and enable managers to review delivery of their current re

14、sponsibilities. These reports should be standard in their presentation anddelivered within minimal intervention or overhead. This type of reporting is described as“ operational reporting”The focus of this paper is the Executive style management reporting2.3Design principles in Management ReportingIt

15、 is recognised that every company will have differing information needs for running that corporation. As such every company will have different management reporting needs. It is, however, necessary when reviewing or developing report content to have in place core design principles. These should incl

16、ude:delivery of information which meets the needs of key decision makers within the organisationdelivery of timely, relevant and accurate information which meets the needs of the Business as well as Financedelivery of information not data, based on the philosophy of“ less is more” (salient,ortingcon

17、ciseofinformationrep vs delivery of significant volumes of numericand other data)“ one version of the truth” which delivers consistency of information across the whole organisation (see Section 2.4 below)use of lead as well as lag indicators (eg. for customer satisfaction, service downtime may be a

18、lead indicator, customer churn a lag indicator)incorporation of operational KPIs as well as core financial measuresapplication of a balance score card approach, ensuring consideration is given to financial, operational, people/staff and customer perspectives.application of exception reporting techni

19、ques, with significant variances being highlightedaction orientated reporting, in terms of commentary and reviewdynamic in nature. The content and format of reports needs to be reviewed and refreshed to ensure they keep pace with changes in the Business2.4Overview of the cascade of informationThe ma

20、nagement reporting strategy should be based on a cascade of information from the Board down (ie. from Board to Divisions to Business Units and ultimately cost centres). This is represented below:Group ReportxXConsolidateDivisional1234ManagementReportsXXXXConsolidateBusiness UnitabcdefghReportsOperat

21、ional/ CostCentre ReportsIn delivering this cascade of information it is necessary to ensure consistency of information from the Board through to the cost centres. This is based on the principleof “ one version of the truth ” . It ensures, for example, that the results of Division X as presented to

22、the Division X MD are the same as those being reviewed by the Group CFO. As well as consistency in content there should also be consistency in the look and feel of reports to ensure Executives and management can negotiatethem with ease.Definition of content needs to be“ top down ” . The CFO/ Board s

23、hould define the Board Report content such that it meets their needs. It also needs to be consistentwith corporate strategy and subsequently used to monitor performance and drive business performance. The needs of the Boardshould then be cascaded down toDivisions, Business Units and ultimately cost

24、centres. This ensures corporate strategy is translated into operational delivery. This can be contrasted with the“ bottoup” content driven approach, where cost centre reporting cascades up to bespoke Business Unit and Division reports. When aggregated at the Board level this isusually characterised

25、by excel consolidations, significant data volumes and the need to refer to inconsistent Division reports.2.5The use of Key Performance Indicators (KPIs)Management reports should contain performance information relating to the key operational issues as well as financial measures. This is important as

26、 changes inoperational measures tend to be lead indicators on future financial performance (eg. network build is behind schedule cash flow savings in the short term, slower sales growth in the longer term).The CFO/ Board should agree on the KPIs presented in the report. General principles on KPIs ar

27、e:-availability: frequency & accuracyrelevance: alignment to critical success factorsacceptance: level of use in the organisation/ industrytopical: relevance to specific strategic initiativesWhen establishing financial and operational measures for inclusion in management reports, this needs to be do

28、ne with an understanding of remuneration and reward structures. The two need to be consistent. Failure to do so will deliver conflicting messages. It is noted reward based measures will have the most powerful influence on day to day behaviours.2.6Example contentAs noted above, each and very organisa

29、tion will have their own needs and opin ions, driving the look, feel and content practice ” management report (Board Report, Division Report and cost centre report) is given, however, in Appendix 1. This rep principles highlighted above and is to be used for reference purposes only.of the management

30、 reports. A “ leading ort demonstrates the leading practiceIn terms of content it includes:Executive summary A synopsis of performance is provided by KPIs accompanied by appropriate action orientated commentary. Use of data is limited to core data onlyAction plancorrective actions specified with con

31、tingencies and sensitivity analysis showing best and worst case scenarios(usually in the form of commentary)Profit and Loss statement P&L account showing period and cumulative positions with highlighted variances against budget. Any major variances should be highlighted and adequately explained. Tre

32、nd analysis should be shown graphically and full year projections shownProjected outturn incorporated in P&LProjected outturns recalculated each month on the basis of actual performance and action plansCashflowActual and projected receipts and payments up to the year endBalance Sheet -position of wo

33、rking capital, assets and long term investments / debt.2.7Leading practice checklistMajor TopicsLeading practice characteristicsGeneral principlesRelevant - The information must be based on the needs of all the decision makers (not just Finance) with a top down focus (from the Board down)Relevant In

34、formation presented should be sharply focused and should reflect the defined objectives and strategy of the organisation.Accurate Information should be of sufficiently high quality that confidence can be placed in it. Its reliability is dependent on its source, integrity and comprehensivenessTimely

35、The information should be available promptly enough to plan from it and take corrective action (see Section 4: Month end close)Integrated Reporting information should include both operational and financial KPIs where the effect and impact of operational performance on financial reporting is clearly

36、understood. Both lead and lag indicators are to be usedBalance scorecard approach The management report should include information on the different aspects of an organisation i.e. Financial, Customers, People and OperationsGraphical presentation - Information should be presented in an easily assimil

37、ated format e.g. in a clear dashboard format and use graphs where appropriateOne version of the truth - Both financial and non financial data sources used across the organisation are consistent (eg. results for Asia Pacific as presented to Group CFO are same as those presented to Asia Pacific MD)Con

38、sistency - The look and feel of the reports from Group to Division to Business Unit to Cost Centre needs to be consistentInformation- The management report is information rich and data lightException reporting Report by exception, highlighting variances to plan (both positive and negative)Indicative

39、 issues / problemsReports are purely financially focused with little attention paid to people, customer, or competitive measuresReporting focuses on the needs of non core decision makers (eg cost centres managers)Management reports are published 15+ days following the month end closeThe format of th

40、e report is number or data based with little or no use of graphical presentationOnly financial KPIs are reportedThe management report is viewed as a “ Finance tool ” . It is not used by operational management.Significant effort devoted to reconciling Business Unit/ Division/ Group results multiple v

41、ersions of the truthThere is little or no consistency between Group, Division, BUs, and Cost centre reportsReporting delivers too much detail and data i.e. it is 30 pages or moreAction orientatedEnsure content and commentary explain operational driversMajor TopicsLeading practice characteristicsbehi

42、nd the information presented as well as being action orientatedPeopleOperational Executives have a key influence/ input in defining reporting content and format. The reporting framework needs to meet their needs as well as those of the Finance functionMacro management: Ability and willingness to foc

43、us on the“ big pictureDedicated management reporting team responsible for accuracy, timeliness and content of the reporting framework. Ideally this would cover both financial and operational information needs, as supported by a management information strategy. This provides ownership and accountabil

44、ity for management information across the organisationThere is consistency between the reporting KPIs and those used by HR / bonus assessed measures (the latter will drive behaviour not the former)Commentary is salient and commercial (i.e. not a repeat of the numbers) and focuses on the drivers of r

45、esults. Finance work closely with operational managers to understand results and jointly prepare commentaryIndicative issues / problemsManagement reporting is delivered by Finance for Finance and is not used by the rest of the BusinessMicro management: Focus on detail and immaterial” figures and adj

46、ustmentsReward based measures differ from reported KPIsAccountability and ownership of management information is dispersed across the organisationCommentary provided does not add any insight intodecision support (eg.“ sales are down 5%”)ProcessThe level of detail and frequency of reporting suits the

47、 maturity of the business. (i.e. mature can manage with more detail less frequently, immature/ changing environment manage with key measures more frequently)Core management information/ flash results are available to the Business Working Day 5 post month end (see Section 4: Month end close)There is

48、limited to no data manipulation prior to finalising the figures and amendments are made monthly in arrears (see Section 4: Month end close)Processes are in place to assess the competitive environmentUse of graphical and exception based reporting to increase the ease ofinterpretationData sources for

49、operational KPIs are validated and tested for accuracy, timeliness and relevanceReporting is at the lowest level of detail and is data intenseNumerous manual adjustments prior to finalising reportsRe-keying of data to generate reportsReports are published 15+ days following month end closeImmaterial

50、 adjustments are allowed to be posted during month end inhibiting the ability to report in a timely manner to key decision makersOperational KPIs and data sources are inconsistent across the business and time consuming to collateMajor TopicsLeading practice characteristicsTechnologyReport production

51、 is automated from a single database and includes automated data checks and validation (refer to Appendix 2 for outline technical architecture)Re-keying and other manual intervention is rarely needed for data gatheringThe database is used for analysis and queries, not the General LedgerStandard proc

52、edures are in place for evaluating requests for new information and for deciding whether it should be collected routinely in futureReporting systems are linked to allow drill-down to appropriate levels of detail (see Section 錯誤！未找到引用源。 : Business Intelligence)Reporting systems allow slice and dice c

53、apability (see Section錯誤！未找到引用源。 : Business Intelligence)Web based reporting to access real-time information (see Section錯誤！未找到引用源。 : Business Intelligence). It is recognised, however, that real time reporting is not realistic in some organisations where data capture is billing data in telcos)Tools

54、are available to managers and employees which allow them to model their decisions to maximise their effect on achievement of the corporate objectiveEnhanced query tools, relational OLAP tools, and multidimensional databases utilised to enhance analysis and deliver information in a flexible mannerIndicative issues / problemsData is held in several different databasesManual intervention and re-keying is necessary to produce the management reportsThe General Ledger is used as an analysis toolException based reporting is not usedLittle or no flexibility in presentation of i