Finance research papers

A company may loose investor confidence if there occur unexpected change in its financial condition and results which weren’t earlier communicated through disclosure of accounting policies in the annual report. Investors and other users of the annual report demand to be informed about the susceptibility of the reported results to change. A rapid change in the company’s financial position and results will further cause investors to loose confidence in the financial statements and consequently the management’s ability to produce reliable and accurate financial results. It is therefore pertinent that company management incorporates critical accounting policies, risks and uncertainties in the annual report. The possibility that dissimilar results could be realized using different assumptions should be clearly stated and emphasized.

William Hill plc has adopted International Financial Reporting Standards (IFRS) and adheres to the Generally Acceptable Accounting Principles (GAAP), hence all its financial statements are prepared in accordance to these standards. Therefore any adjustments made to the balance sheet would as a result reflect a difference in the recognition of dividends, presentation of Goodwill, intangible assets as well as deferred tax balances (William Hill AR, 2006, p.14). Besides these differences, IFRS accounting policies affects the presentation of financial information in the annual report.