Summary of Financial Reporting and Management Reporting Systems.

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Summary

This chapter began by examining the GLS and the FRS, two operationally interdependent systems that are vital to the economic activities of the organization. We focused first on standard GLS procedures and on the files that constitute a GLS database. Then turning to the FRS, we examined how financial information is provided to both external and internal users through a multistep reporting process. The emerging technology of XBRL is changing traditional financial reporting for many organizations. We reviewed the key features of XBRL and considered the internal control implications of this technology.

This chapter then looked at discretionary reporting systems that constitute the MRS. Discretionary reporting is not subject to the professional guidelines and legal statutes that govern nondiscretionary financial reporting. Rather, it is driven by several factors, including management principles, management function, level, decision type, problem structure, responsibility accounting, and behavioral considerations. The chapter investigated the impact of each factor on the design of the MRS.

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