Global Journal of Management and Business Research, C: Finance, Volume 22 Issue 5

indispensable to express any decision on the dynamic financial situation of the company. In the international, American, and Italian national standards illustrated in the previous paragraph, this value can be challenging to determine, i.e., absolutely impossible to quantify, representing a limitation. A heavy one of the accounting standards outlined above AND represents a highly relevant limitation of the flow data presented in the statements prepared according to these standards. A further negative element of the cash flow statement governed by the accounting as mentioned above principles is the circumstance that this is ready and unrelated to the scheme and structure assumed by the balance sheet and the profit and loss. The three documents appear as a single information structure; as in all countries covered by the accounting as mentioned above standards, financial reporting consists of at least the three papers mentioned earlier. The observation is that in some countries, such as Italy, financial reporting is formed by a fourth document consisting of notes on financial reporting. But if we focus our attention on the three accounting documents, i.e. balance sheet, profit and loss and cash flow statement, we can see that the three papers appear to be unrelated in terms of the terms used. There is no coherence between the terms used in the three documents. There seems to be no desire to create an integrated system, neither from the documents issued by the national or international bodies mentioned above nor from the regulations and legislation present in Italy is present in many other nations that refer, directly or indirectly, to the accounting principles illustrated in the preceding pages. The information structure of financial reporting intended for the outside world and used, often, also by the internal managers of the company to manage the company itself, therefore, appears to be a set of documents that are not coherent at the formal level of the expressions used. One term can acquire different meanings in various documents, just as two other words in multiple documents constituting financial reporting can have the same meaning. This creates confusion in those who manage the company and those who, from the outside, must understand the company's situation. To this can be added the fact that, indeed, whoever issued the inconsistent balance sheet, profit and loss and cash flow statement schemes, cannot have assumed consistency, at a formal terminological level and a substantive level, with the documents constituting management control, i.e. all those documents that analyse the company not as a single entity but as a set of units (products, departments, etc.) that are analysed separately to better understand the performance of the company at the level of individual products, individual departments, individual sectors, etc. . all the documents constituting management control and strategic control cannot be consistent, at a formal substantive level, with the phrases and EE structures proposed in financial reporting by the various accounting standards, since the same documents constituting financial reporting are not consistent with each other from a formal and substantive point of view. This is a severe limitation since formal and substantive consistency between all the company's information documents is an essential element for those who manage the company to be able to make the best decisions and implement a decision-making process that leads to the achievement of profit maximisation objectives, the attainment of financial balance, both static and dynamic, and excellent general company performance.. For this reason, the writer believes that the cash flow statement, as well as the balance sheet and the profit and loss, should be part of an information system integrated with management control that allows for a set of information documents that are coherent from every point of view, both formal and substantial. This is a problem of internal company management and not external communication to companies. As far as external communication is concerned, the documents proposed by the various accounting principles of the balance sheet, profit and loss, and cash flow statement can be accepted, albeit characterised by considerable information limits, as they guarantee coherence between the documents issued by all the companies of the same nation OR by several countries that use the accounting as mentioned earlier principles. If, on the other hand, we focus our attention on the company's internal management, the situation changes completely. The ability to rely on an integrated information system is essential for the company's management to be carried out most effectively and efficiently. Only this can achieve excellent profit, financial and asset objectives. In an integrated information system, each word must have an unambiguous meaning. It is not conceivable that an accounting item has multiple meanings or that most things have a single meaning. Therefore, the circumstance that there should be this consistency between the terms used in the various documents that make up the integrated information system does not appear to be an optional extra but rather an indispensable element for the company's information system to be able to effectively provide the company's internal managers with a clear, correct and global vision of the company's income, financial and asset situation. Both from a general point of view, through the global schemes such as the balance sheet, the profit and loss and the annual cash flow statement, and through the documents that analyse the company in its units such as individual products, individual departments, individual sectors, etc. To achieve this, it is proposed to reclassify the balance sheet the profit and loss according to these structures, which are characterised by complete formal and substantial consistency: 27 Global Journal of Management and Business Research Volume XXII Issue V Version I Year 2022 ( ) C © 2022 Global Journals Does the Formal Structure of the Cash Flow Statement have an Impact on the Understanding of the Data Contained in the Report Explaining the Company's Financial Dynamics?