Meaning of Annual Report

Meaning of Annual Report

Meaning of Annual Report

The report prepared and published at the end of an accounting year is called annual report. The annual report is one of the various publications made out by companies. All the public limited companies are obliged to prepare a report at the end of every accounting year for their shareholders. Annual reports are prepared at the end of the fiscal year for external users to gain financial information about the inner workings of the company and what management plans to do in the future.

A standard report includes the following sections:

  • Letter to Shareholders
  • Financial History and Highlights
  • Management Discussion and Analysis
  • Management’s Report on Financial Statements and on Internal Controls
  • Report of Independent Accountants sometimes called the Auditor’s Report including a section on internal controls

Financial Statements including a:

  • Balance Sheet
  • Income Statement
  • Statement of Stockholders’ Equity
  • Cash Flows Statement

An annual report is comprised of the audited accounts of the company with the auditors’ report, the director’s report and any other presentations on the funds, performance and activities of the company.