Financial Controls in an Organization - Article Example

Financial statements are among the most important tools that are used by organizations in this endeavor. They are generally important records that may be kept by an organization or any business entity for formality. Studies give numerous reasons why this tool is among the most important tools used to check the financial position of an organization (Buffet & Clark, 18).

Financial statements are vitally useful in the determination of the progress of the business entity. In most cases, financial statements regarding assets and liabilities are used to evaluate whether a business is making profits or losses. This is very important in the sense that the organization is in a better position to evaluate the strategies that need to be implemented for the success of the organization (Fabozzi & Drake, 1-5).

They are also used by the management of the organization to plan for the future goals and objectives of the organization. In most cases, the goals of the organization are bound to fade due to time and improvements in technology. To ensure that the organization competes well in the market, the goals have to be adjusted to match those of the current trends in the market (Plunket et al. 497).