OPP4022 Business Finance Report Assignment for Apafari Ltd

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1: Introduction To Business Finance Report Assignment

This report will emphasize on business finance applicable for Apafari Ltd consideration to financial information users and preparation of income statement and balance sheet will be considered. Additional aspects of this report will cover various accounting systems and discuss their potential limitations and benefits.

2: Users of financial information and specific needs

The first and second user of financial information applicable for Apafari Ltd involves employees and managers and their specific need is necessary to establish functional feasibility achieved on a daily basis. The third and the fourth users of financial information include board of directors and owners whose need specifies annual performance achieved by Apafari Ltd. The fifth and sixth users of financial information include investors and creditors and their influence is perhaps the most important for Apafari Ltd to succeed financially. Olayinka (2022), expressed that specific need of investors and creditors for financial information is attributed with assessment of repayment interval or credit rating of a company as well as determining overall returns that can be fetched from investments. The seventh and eighth user of financial information include customers and vendors and their respective needs involve overall assessment of products and services offered or acquired at regular intervals.

3: Income Statement and Balance Sheet

a: Income Statement

Table 1: Income Statement

b: Balance Sheet

Table 2: Balance Sheet

4: Accounting systems

a: Problems relating to usage of manual systems of accounting

The main problems associated with usage of the manual accounting system by Apafari Ltd involves high time consumption needed to facilitate financial record keeping. As per critical views of Yoon (2020), high time consumption of manual accounting systems further aggravates the issues relating with proper maintenance in publication of financial statements and reports. Increase in possibility of errors is also identified as a significant drawback of manual accounting systems which can lead to improper amounts being recorded for various sets of accounts.

b: Benefits and drawbacks of using accounting software

Benefits

The primary benefit available to Apafari Ltd if accounting software is used or purchased is having the ability to increase efficiency in accounting processes. Second benefit available to Apafari Ltd is associated with having the advantage of automating the accounting process and functions in order to prepare and finalize financial reports. As explained by Salam (2022), automation further encourages easy preparation of invoices and trackability of receivables and payables to ensure better organizational reliability and financial ethics.

Drawbacks

The primary drawback associated with usage of accounting software by Apafari Ltd is high cost or expenditure needed to be incurred for acquisition. The second drawback associated with usage of accounting software includes possibilities of security breach and frauds which can affect financial strengthening of Apafari Ltd. As per critical narratives of Hamzah et al. (2023), the high risk of security breach and frauds due to accounting software can trivialize a company’s credibility thereby affecting financial dominance.

c: Processes through which problems of accounting systems can be mitigated

In order to mitigate the problems associated with accounting software, the primary step that can be considered involves authorization and creation of protocols. The process of authorisation and creation of protocols should allow Apafari Ltd to assign a specific group of individuals who are solely responsible for accounting data management and maintenance (Abdullah et al. 2022). High risk of security breach and fraud can be mitigated with the help of conducting frequent external audits to maintain a healthy financial image in the market.

5: Conclusion

This report has illustrated that major users of accounting information include investors and owners who use it for establishing credit rating and annual performance assessment respectively. Benefits and drawbacks of accounting software include higher efficiency and high costs while mitigation steps for removing problems of accounting software include consideration of protocols and accountability.