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Management at this level involves: 
(a) 
Decisions as to the 
right mix of share and loan capital
(b) 
Decisions as to 
when that capital should be raised
(eg to fund a major acquisition) 
(c) 
Keeping these important shareholders and lenders informed
about the company and its 
prospects 
Much of the 
internal
 
financial management of a company is conducted with the shareholders' return in 
mind. For example, a company embarking on an investment project will assess its worth by the return or 
value expected. 
1.7.3 Financial accounting 
(a) 
Recording financial transactions. 
Financial accounting covers the classification and recording of 
transactions in monetary terms in accordance with established concepts, principles, accounting 
standards and legal requirements. It presents as accurate a view as possible of the effect of those 
transactions over a period of time and at the end of the time. In the UK the Companies Act 
requires
directors of companies to maintain adequate records to show transactions, assets and 
liabilities and from which accounts can be prepared to show profit or loss for the accounting 
reference period and a statement of financial position (balance sheet), detailing assets and 
liabilities and capital at the end of that reference period.
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CHAPTER 6
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ORGANISATIONAL CULTURE AND COMMITTEES 
 
159 
(b) 
Reporting to shareholders. 
In addition, the information must be reported to the 
shareholders 
in 
accordance with the detailed disclosure requirements of the Companies Act. All this information 
will be subject to statutory 
audit
. Other organisations, such as building societies and charities, 
are subject to similar legislation. 
1.7.4 Treasury management 
Treasury management