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
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A common factor among both statements is the release of the balance as of December 31 year after year (Bank of America, 2007) (Wells Fargo & Company, 2007). The fourth inter-relationship of data that can be viewed from these two banks also has strong ties to the basic accounting equation. The key components of the basic accounting equation that are illustrated in Bank of America’s and Wells Fargo's financial statements are found in the balance sheet. The balance sheets are broken into the three main sections of assets, liabilities, and stockholders equity. The subdivisions under each of these sections are as similar as they are different. Some of the similarities are such things as cash, goodwill and other assets, while the dissimilarities can range depending on the type of business that the bank chooses to do (Bank of America, 2007) (Wells Fargo & Company, 2007). In keeping with the basic accounting equation, the total shareholder equity plus total liabilities equals total assets.
The next key financial relationships between Bank of America and Wells Fargo are each company's control techniques described in their financial statements. To understand what is described in their financial statements one must first understand what organizational control techniques are. Control techniques empower managers with the amount and type of information needed to monitor and