An easy guide to reading financial statements

by Sean O'Reilly on Aug 2, 2022

guide to financial statements

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This guide to reading financial statements is in video format. Learning basic accounting is as easy as following a recipe or applying for a loan. The purpose of this video is to teach you the basics of reading financial statements.

It’s essential for board members and company directors to have a firm grasp of the basics of financial reporting. 

You don’t have to be an accountant to understand how to look at a financial statement and get a firm picture of the financial health of an organisation.

Board members must be able to read financial statements to ask the right questions of the executive team. 

Board members must also identify red flags showing an organisation’s financial difficulty or danger. 

One of the duties of a board member and company director is to prepare books of records. 

In this video guide to reading financial statements, Seán O’Reilly will show you how to understand financial information, read a balance sheet and gauge the financial health of an organisation. Seán will also give examples of what questions board members should ask and any warning signs to watch. 

Key takeaways

  • Sean examines the main elements that make up a financial report including income statements, balance sheets, cash flow statements and the director’s report.
  • He looks at your financial reporting requirements, including the regulatory environment you operate in.
  • He explains the difference between limited companies and charities.
  • He discusses financial reporting frameworks.
  • Sean explains the difference between management accounting and financial accounting.
  • He also looks at the red flags board members need to look out for on a set of accounts.
  • Sean explains what a going concern means; and
  • The role of the audit committee.
  • Sean also examines the key future trends in accounting and finance which board members should be aware.

About Seán O’Reilly

Seán O’Reilly is the assistant head of the accounting department at the Technological University Dublin, city campus. Seán trained and qualified as a chartered accountant with PwC. He also lectures on the FAE programme for chartered accountants in Ireland and the financial matters module with the Corporate Governance Institute.

Seán has experience with professional accountancy bodies as a lecturer, examiner and expert committee member. He has experience as a company founder, director, non-executive director and consultant, which includes international projects.

Seán is currently a non-executive director in an educational charity and acts on advisory boards for several financial technology startups.

Further reading

  1. What are financial statements?
  2. How to set up a board of directors
  3. An audit scandal at Wirecard
balance sheets
Financial Statements

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