Key Relationships Between Bank of America and Wells Fargo

1040 WordsSep 1, 20085 Pages
Key Financial Relationships: Bank of America and Wells Fargo Bank of America and Wells Fargo are separate banks, however; both of these institutions share many similarities when reporting their financial statements. The inter-relationships of the data provided in the statements seem to exemplify the correlation of accounting practices between these two banks. As large as these two banks have become, and as complex, one can see that the banks’ roots are still tied firmly to the basic accounting equation. While both banks use organizational control techniques, their financial statements clearly indicate that each bank wishes to discuss a specific type of organizational control used by their company. To better understand the similarities…show more content…
As money is spent statements are updated to reflect the accounts affected by the spending. Managers use these financial statements, such as an income statement or balance sheet, to check the progress of plans and programs. Management uses the information provided by financial statements to monitor financial resources and activities. The income statement shows the results of the organization's operations over a specific period, such as revenues, expenses, and profit or loss. The balance sheet shows what the organization is worth (assets) at a particular point and the extent to which those assets were financed through debt (liabilities) or owner's investment (equity) (Bank of America, 2007). Wells Fargo's financial statements discusses financial audits, or formal investigations, that are regularly performed to ensure that the organization’s financial management procedures follow generally accepted procedures, policies, laws, and ethical guidelines. Audits may be conducted internally or externally. Wells Fargo goes into even more detail and discusses their financial ratio analysis that examines the relationship between specific figures on the financial statements and helps explain the significance of those figures. Liquidity ratios measure an organization's ability to generate cash. Profitability ratios measure an

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