This document provides an overview of financial accounting and reporting. It defines accounting and outlines its key features. It discusses the roles of various parties that use or are involved in the development of accounting standards, including managers, investors, creditors, auditors, the SEC, FASB, GASB, EITF, AICPA, AAA, IRS, and IASB. It also explains the standard-setting process used by FASB and provides definitions for key terms like GAAP.
1. Accounting is defined as a service activity, descriptive discipline, and information system that provides quantitative financial information to interested parties to assist with economic decision making. The objective of accounting is to be useful for assessing resource allocation.
2. Accounting standards have developed through the work of standard setting bodies like the IASB and FASB to meet the needs of external users. The IASB issues International Financial Reporting Standards using a robust due process and seeks input from various stakeholders.
3. There are various users of accounting information like managers, investors, creditors, regulators and more that influence the development of accounting standards. Standards aim to close the expectations gap between what the public thinks accountants can do and what
The document provides an overview of the development of accounting principles and professional practice. It discusses how the environment of accounting has evolved over time to meet changing demands and influences. Three key influences are: 1) recognizing scarce resources, 2) current concepts of property rights and equity, and 3) measuring information for absentee investors. The document also describes the objectives of financial reporting, key qualitative characteristics of accounting information, elements of financial statements, and basic principles of accounting including measurement, revenue/expense recognition, and full disclosure.
This document provides an overview of key concepts in financial reporting and US Generally Accepted Accounting Principles (GAAP). It discusses the major standards-setting bodies that establish GAAP, including the SEC, FASB, and AICPA. It also summarizes the conceptual framework underlying financial reporting, including assumptions, principles, elements of financial statements, and recognition and measurement guidelines.
This document provides an overview of financial reporting and accounting standards. It defines accounting as a service that provides quantitative financial information to help users make economic decisions. The three primary financial statements are the balance sheet, income statement, and statement of cash flows. The Financial Accounting Standards Board (FASB) sets accounting standards in the US according to a formal process.
This chapter discusses financial reporting and accounting standards. It identifies the major financial statements and standard-setting bodies like the IASB and FASB. The objective of financial reporting is to provide useful information to capital providers. High-quality standards are necessary and IFRS are global standards used in over 100 countries. Financial reporting faces challenges like different political environments and an expectations gap between what accountants provide and users want.
This document outlines the syllabus for an accounting course covering Indian Accounting Standards (IND AS). The syllabus is divided into 3 modules. Module 1 covers an introduction to accounting standards, frameworks for financial statements, and an overview of accounting standards. It provides details on regulatory bodies that issue standards in India and benefits of standards. Module 2 covers various topics related to financial statements of companies. Module 3 covers additional accounting topics including investments, insurance claims, departmental accounts, and partnership accounts. The document also provides details on the convergence of Indian standards with IFRS and differences between the two frameworks.
IFRS stands for International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board to provide a common global language for business affairs. The goal of IFRS is to have a single set of high-quality accounting standards used worldwide. Adopting IFRS is important because it allows companies to operate globally and provides more aligned standards as countries work to converge their own standards with IFRS. However, there are also challenges to IFRS implementation, such as difficulties applying some standards that require fair value measures and concerns about costs for small and medium enterprises.
This document provides an overview of the International Accounting Standards Board (IASB) framework for financial reporting and standards.
It begins with an introduction to the IASB and the need for a common set of global accounting standards to improve comparability. It then discusses key aspects of the IASB conceptual framework, including its purpose and status, users and objectives of financial reporting, qualitative characteristics of useful financial information, and the elements of financial statements.
The document also provides a high-level summary of experiences with IFRS adoption in Canada and the US. It concludes with a brief look ahead at ongoing projects by the IASB and FASB to further improve and converge accounting standards internationally.
1. Accounting is defined as a service activity, descriptive discipline, and information system that provides quantitative financial information to interested parties to assist with economic decision making. The objective of accounting is to be useful for assessing resource allocation.
2. Accounting standards have developed through the work of standard setting bodies like the IASB and FASB to meet the needs of external users. The IASB issues International Financial Reporting Standards using a robust due process and seeks input from various stakeholders.
3. There are various users of accounting information like managers, investors, creditors, regulators and more that influence the development of accounting standards. Standards aim to close the expectations gap between what the public thinks accountants can do and what
The document provides an overview of the development of accounting principles and professional practice. It discusses how the environment of accounting has evolved over time to meet changing demands and influences. Three key influences are: 1) recognizing scarce resources, 2) current concepts of property rights and equity, and 3) measuring information for absentee investors. The document also describes the objectives of financial reporting, key qualitative characteristics of accounting information, elements of financial statements, and basic principles of accounting including measurement, revenue/expense recognition, and full disclosure.
This document provides an overview of key concepts in financial reporting and US Generally Accepted Accounting Principles (GAAP). It discusses the major standards-setting bodies that establish GAAP, including the SEC, FASB, and AICPA. It also summarizes the conceptual framework underlying financial reporting, including assumptions, principles, elements of financial statements, and recognition and measurement guidelines.
This document provides an overview of financial reporting and accounting standards. It defines accounting as a service that provides quantitative financial information to help users make economic decisions. The three primary financial statements are the balance sheet, income statement, and statement of cash flows. The Financial Accounting Standards Board (FASB) sets accounting standards in the US according to a formal process.
This chapter discusses financial reporting and accounting standards. It identifies the major financial statements and standard-setting bodies like the IASB and FASB. The objective of financial reporting is to provide useful information to capital providers. High-quality standards are necessary and IFRS are global standards used in over 100 countries. Financial reporting faces challenges like different political environments and an expectations gap between what accountants provide and users want.
This document outlines the syllabus for an accounting course covering Indian Accounting Standards (IND AS). The syllabus is divided into 3 modules. Module 1 covers an introduction to accounting standards, frameworks for financial statements, and an overview of accounting standards. It provides details on regulatory bodies that issue standards in India and benefits of standards. Module 2 covers various topics related to financial statements of companies. Module 3 covers additional accounting topics including investments, insurance claims, departmental accounts, and partnership accounts. The document also provides details on the convergence of Indian standards with IFRS and differences between the two frameworks.
IFRS stands for International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board to provide a common global language for business affairs. The goal of IFRS is to have a single set of high-quality accounting standards used worldwide. Adopting IFRS is important because it allows companies to operate globally and provides more aligned standards as countries work to converge their own standards with IFRS. However, there are also challenges to IFRS implementation, such as difficulties applying some standards that require fair value measures and concerns about costs for small and medium enterprises.
This document provides an overview of the International Accounting Standards Board (IASB) framework for financial reporting and standards.
It begins with an introduction to the IASB and the need for a common set of global accounting standards to improve comparability. It then discusses key aspects of the IASB conceptual framework, including its purpose and status, users and objectives of financial reporting, qualitative characteristics of useful financial information, and the elements of financial statements.
The document also provides a high-level summary of experiences with IFRS adoption in Canada and the US. It concludes with a brief look ahead at ongoing projects by the IASB and FASB to further improve and converge accounting standards internationally.
Regulatory framework for accounting standardslarrotci
This document discusses the regulation and standardization of accounting practices. It explains that accounting standards are set at the national and international level to ensure consistency and comparability. The International Accounting Standards Board issues International Financial Reporting Standards through a multi-step due process. National standard setting bodies and professional accounting organizations also play roles in regulating the industry and representing members.
The International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) to provide a common global language for business affairs. The key elements of financial statements under IFRS include statements of financial position, comprehensive income, changes in equity, cash flows, and accompanying notes. IFRS aims to make company accounts more understandable and comparable internationally to benefit investors and businesses operating globally.
1. The document outlines the conceptual framework for financial reporting established by the FASB. The framework consists of three levels: the objective of financial reporting, fundamental qualitative characteristics and elements, and concepts for recognition, measurement, and disclosure.
2. It describes the key components of each level, including the basic objective to provide useful information to investors and creditors, qualitative characteristics like relevance and faithful representation, and defined elements like assets, liabilities, and equity.
3. Basic assumptions and principles are also discussed, such as the monetary unit and historical cost assumptions, as well as the revenue and expense recognition principles. An exception for the cost constraint is noted.
International financial reporting standardsBiswajit Paul
The document discusses the key differences between product controls and process controls as approaches to quality management. Product controls focus on inspection and sorting of finished products to identify defects, while process controls aim to prevent defects by rigorously controlling and monitoring manufacturing processes. Process controls can achieve higher quality but require more extensive documentation, calibration, and measurement compared to product controls. The choice of approach has important implications for costs, waste, management expectations, and regulatory compliance.
International financial reporting standards (ifrs)pptIDBI Capital
International Financial Reporting Standards (IFRS) are a global set of accounting standards meant to provide consistency and transparency in financial reporting around the world. IFRS provide rules that accountants must follow to prepare financial statements that are comparable, understandable, reliable and relevant to both internal and external users. IFRS financial statements include a statement of financial position, statement of comprehensive income, statement of changes in equity, and cash flow statement. Many countries around the world either require or allow the use of IFRS to standardized financial reporting practices globally.
financial accounting and accounting standardsYuya Shina
The document discusses accounting standards and financial reporting. It identifies the major financial statements as the balance sheet, income statement, statement of cash flows, and statement of owners' equity. It explains that accounting assists with efficient allocation of resources by providing financial information to help users make capital allocation decisions. The challenges facing accounting are discussed, such as issues with non-financial measurements and timeliness. The objectives of financial reporting are to provide useful information to investors and creditors. There is a need for accounting standards due to the various users needing consistent financial information. The major bodies that set accounting standards are the SEC, FASB, AICPA, and GASB.
This document discusses key financial statements and ratio analysis. It covers the four main financial statements - the income statement, balance sheet, statement of retained earnings, and statement of cash flows - and what each reports. It then discusses ratio analysis and different types of ratios used to analyze a company's liquidity, debt, profitability, and market value. These ratios include the current ratio and quick ratio. The document provides examples of each financial statement and calculates ratios for a sample company.
It explains the IASB’s Regulatory framework including the Companies act, Stock exchange listing rules and IFRS. It also explains the IASB relationship with other bodies and how they operate and how the IFRS are produced
The document summarizes key aspects of the development of financial accounting standards and principles in the United States. It discusses the roles of organizations like the SEC, FASB, AICPA and others in establishing GAAP. It also outlines challenges to financial reporting like providing nonfinancial metrics, forward-looking information and reconciling US GAAP with IFRS. Ethical considerations are an important part of the accounting profession.
This document provides an overview of financial systems and accounting concepts. It discusses the key branches of accounting including financial accounting and cost accounting. The main topics covered include accounting concepts like the business entity concept, money measurement concept, and accrual concept. It also outlines conventions regarding financial statements such as consistency, disclosure, and conservation. The overall purpose is to understand the financial systems, statements, and accounting standards used in business.
Corporate financial reporting and features by hilal mir ktb.HILAL AHMAD MIR
Corporate finance involves the financing required to operate a corporation or business. It includes raising capital through various means like loans, equity shares, debentures, and deposits. The funds are then utilized to finance assets and meet working capital needs. Corporate financial reporting provides key financial information to stakeholders through reports like the income statement, balance sheet, cash flow statement, and notes on financial policies. These reports show the company's profits/losses, financial position, cash flows, and explanatory details to help investors make informed decisions.
This document provides an overview and review of key concepts from Chapter 4 of the textbook on the income statement and related information. It discusses the purpose and limitations of the income statement, its major elements, different formats, sections, and how to report various income items such as discontinued operations, extraordinary items, and changes in accounting principles. It also covers earnings per share, the retained earnings statement, comprehensive income, and the statement of stockholders' equity.
Day 1 s1 underlying ifrs concepts introduction and conceptual framework ia8 1...ESHETIE MEKONENE AMARE
This document provides an introduction and overview of International Financial Reporting Standards (IFRS). It defines IFRS as a single set of high-quality global accounting standards issued by the International Accounting Standards Board. The purpose of IFRS is to increase transparency and comparability for investors and other users of financial statements. The document outlines the IASB standard-setting process and lists the authoritative IFRS pronouncements. It also discusses Ethiopia's adoption of IFRS for financial reporting and the role of the Accounting and Auditing Board of Ethiopia in regulating IFRS implementation. Finally, it introduces the IFRS Conceptual Framework which establishes fundamental concepts for financial reporting.
Kieso Ch01 Financial Reporting and Accounting StandardsAhmad Rudi
This document provides an overview of financial reporting and accounting standards. It discusses the objectives of financial reporting which is to provide useful information to present and potential equity investors and creditors. It also outlines the major financial statements and additional financial reports companies provide. Furthermore, it explains the need for high-quality standards due to globalization and identifies the International Accounting Standards Board and IOSCO as the two major standard-setting organizations.
This document summarizes a presentation on the International Financial Reporting Standards Conceptual Framework. It discusses key concepts such as the objective of financial reporting which is to provide useful information to investors, lenders and other creditors. It also discusses the qualitative characteristics of relevant and faithfully represented financial information, and fundamental elements such as assets, liabilities and equity. The presentation provides examples and discusses concepts such as recognition and measurement in financial reporting.
International Financial Reporting Standards (IFRS) are accounting standards adopted by the International Accounting Standards Board. IFRS include standards previously issued by the International Accounting Standards Committee between 1973 and 2001. The IASB continues developing IFRS standards. IFRS aim to provide consistent and transparent accounting practices globally through principles-based standards. They require the use of judgment in selecting policies where no standard applies directly and refer to the IFRS conceptual framework.
1. The document discusses the conceptual framework for financial reporting, which provides the objectives and fundamental concepts that guide standard setting and financial reporting.
2. The conceptual framework consists of three levels: the objectives of financial reporting, the qualitative characteristics and elements that comprise fundamental concepts, and recognition and measurement concepts as operational guidelines.
3. The basic objective is to provide financial information to present and potential investors, lenders and creditors that is useful for decision making about allocating resources to the entity. Key fundamental concepts include relevance, faithful representation, comparability, and understandability as qualities of useful financial information.
chapter- 1 inroduction to advanced financial accounting.pptxMohamedAbdi347025
This document provides an overview of accounting concepts including the framework, objectives, and standards of accounting. It defines accounting as recording, classifying, and summarizing financial transactions and events. The key objectives of accounting are to systematically record transactions, ascertain financial results and position, and provide information to decision makers. International standards like IFRS and domestic standards like US GAAP aim to standardize accounting policies for consistency and comparability.
This document discusses the objectives and characteristics of financial accounting and reporting. It provides information on:
- The key objective of financial reporting is to provide useful information to present and potential equity investors and creditors.
- International standard setting is led by the International Accounting Standards Board (IASB), which issues International Financial Reporting Standards (IFRS) used in over 115 countries.
- There are ongoing efforts toward convergence between IFRS and US GAAP standards to eliminate major differences in accounting treatments over time. Both standard setters use due process and seek input from stakeholders.
The document provides an overview of the basis of Islamic accounting theory. It discusses accounting and its environment, objectives of accounting, and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). Some key differences between conventional and Islamic accounting are highlighted, such as Islamic accounting being based on ethical Sharia law versus commercial law, and its focus on full disclosure and public accountability rather than limited disclosure and personal accountability. The objectives of Islamic accounting are to identify both socio-economic and religious events/transactions and ensure transactions are fair and just according to Sharia principles.
Regulatory framework for accounting standardslarrotci
This document discusses the regulation and standardization of accounting practices. It explains that accounting standards are set at the national and international level to ensure consistency and comparability. The International Accounting Standards Board issues International Financial Reporting Standards through a multi-step due process. National standard setting bodies and professional accounting organizations also play roles in regulating the industry and representing members.
The International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) to provide a common global language for business affairs. The key elements of financial statements under IFRS include statements of financial position, comprehensive income, changes in equity, cash flows, and accompanying notes. IFRS aims to make company accounts more understandable and comparable internationally to benefit investors and businesses operating globally.
1. The document outlines the conceptual framework for financial reporting established by the FASB. The framework consists of three levels: the objective of financial reporting, fundamental qualitative characteristics and elements, and concepts for recognition, measurement, and disclosure.
2. It describes the key components of each level, including the basic objective to provide useful information to investors and creditors, qualitative characteristics like relevance and faithful representation, and defined elements like assets, liabilities, and equity.
3. Basic assumptions and principles are also discussed, such as the monetary unit and historical cost assumptions, as well as the revenue and expense recognition principles. An exception for the cost constraint is noted.
International financial reporting standardsBiswajit Paul
The document discusses the key differences between product controls and process controls as approaches to quality management. Product controls focus on inspection and sorting of finished products to identify defects, while process controls aim to prevent defects by rigorously controlling and monitoring manufacturing processes. Process controls can achieve higher quality but require more extensive documentation, calibration, and measurement compared to product controls. The choice of approach has important implications for costs, waste, management expectations, and regulatory compliance.
International financial reporting standards (ifrs)pptIDBI Capital
International Financial Reporting Standards (IFRS) are a global set of accounting standards meant to provide consistency and transparency in financial reporting around the world. IFRS provide rules that accountants must follow to prepare financial statements that are comparable, understandable, reliable and relevant to both internal and external users. IFRS financial statements include a statement of financial position, statement of comprehensive income, statement of changes in equity, and cash flow statement. Many countries around the world either require or allow the use of IFRS to standardized financial reporting practices globally.
financial accounting and accounting standardsYuya Shina
The document discusses accounting standards and financial reporting. It identifies the major financial statements as the balance sheet, income statement, statement of cash flows, and statement of owners' equity. It explains that accounting assists with efficient allocation of resources by providing financial information to help users make capital allocation decisions. The challenges facing accounting are discussed, such as issues with non-financial measurements and timeliness. The objectives of financial reporting are to provide useful information to investors and creditors. There is a need for accounting standards due to the various users needing consistent financial information. The major bodies that set accounting standards are the SEC, FASB, AICPA, and GASB.
This document discusses key financial statements and ratio analysis. It covers the four main financial statements - the income statement, balance sheet, statement of retained earnings, and statement of cash flows - and what each reports. It then discusses ratio analysis and different types of ratios used to analyze a company's liquidity, debt, profitability, and market value. These ratios include the current ratio and quick ratio. The document provides examples of each financial statement and calculates ratios for a sample company.
It explains the IASB’s Regulatory framework including the Companies act, Stock exchange listing rules and IFRS. It also explains the IASB relationship with other bodies and how they operate and how the IFRS are produced
The document summarizes key aspects of the development of financial accounting standards and principles in the United States. It discusses the roles of organizations like the SEC, FASB, AICPA and others in establishing GAAP. It also outlines challenges to financial reporting like providing nonfinancial metrics, forward-looking information and reconciling US GAAP with IFRS. Ethical considerations are an important part of the accounting profession.
This document provides an overview of financial systems and accounting concepts. It discusses the key branches of accounting including financial accounting and cost accounting. The main topics covered include accounting concepts like the business entity concept, money measurement concept, and accrual concept. It also outlines conventions regarding financial statements such as consistency, disclosure, and conservation. The overall purpose is to understand the financial systems, statements, and accounting standards used in business.
Corporate financial reporting and features by hilal mir ktb.HILAL AHMAD MIR
Corporate finance involves the financing required to operate a corporation or business. It includes raising capital through various means like loans, equity shares, debentures, and deposits. The funds are then utilized to finance assets and meet working capital needs. Corporate financial reporting provides key financial information to stakeholders through reports like the income statement, balance sheet, cash flow statement, and notes on financial policies. These reports show the company's profits/losses, financial position, cash flows, and explanatory details to help investors make informed decisions.
This document provides an overview and review of key concepts from Chapter 4 of the textbook on the income statement and related information. It discusses the purpose and limitations of the income statement, its major elements, different formats, sections, and how to report various income items such as discontinued operations, extraordinary items, and changes in accounting principles. It also covers earnings per share, the retained earnings statement, comprehensive income, and the statement of stockholders' equity.
Day 1 s1 underlying ifrs concepts introduction and conceptual framework ia8 1...ESHETIE MEKONENE AMARE
This document provides an introduction and overview of International Financial Reporting Standards (IFRS). It defines IFRS as a single set of high-quality global accounting standards issued by the International Accounting Standards Board. The purpose of IFRS is to increase transparency and comparability for investors and other users of financial statements. The document outlines the IASB standard-setting process and lists the authoritative IFRS pronouncements. It also discusses Ethiopia's adoption of IFRS for financial reporting and the role of the Accounting and Auditing Board of Ethiopia in regulating IFRS implementation. Finally, it introduces the IFRS Conceptual Framework which establishes fundamental concepts for financial reporting.
Kieso Ch01 Financial Reporting and Accounting StandardsAhmad Rudi
This document provides an overview of financial reporting and accounting standards. It discusses the objectives of financial reporting which is to provide useful information to present and potential equity investors and creditors. It also outlines the major financial statements and additional financial reports companies provide. Furthermore, it explains the need for high-quality standards due to globalization and identifies the International Accounting Standards Board and IOSCO as the two major standard-setting organizations.
This document summarizes a presentation on the International Financial Reporting Standards Conceptual Framework. It discusses key concepts such as the objective of financial reporting which is to provide useful information to investors, lenders and other creditors. It also discusses the qualitative characteristics of relevant and faithfully represented financial information, and fundamental elements such as assets, liabilities and equity. The presentation provides examples and discusses concepts such as recognition and measurement in financial reporting.
International Financial Reporting Standards (IFRS) are accounting standards adopted by the International Accounting Standards Board. IFRS include standards previously issued by the International Accounting Standards Committee between 1973 and 2001. The IASB continues developing IFRS standards. IFRS aim to provide consistent and transparent accounting practices globally through principles-based standards. They require the use of judgment in selecting policies where no standard applies directly and refer to the IFRS conceptual framework.
1. The document discusses the conceptual framework for financial reporting, which provides the objectives and fundamental concepts that guide standard setting and financial reporting.
2. The conceptual framework consists of three levels: the objectives of financial reporting, the qualitative characteristics and elements that comprise fundamental concepts, and recognition and measurement concepts as operational guidelines.
3. The basic objective is to provide financial information to present and potential investors, lenders and creditors that is useful for decision making about allocating resources to the entity. Key fundamental concepts include relevance, faithful representation, comparability, and understandability as qualities of useful financial information.
chapter- 1 inroduction to advanced financial accounting.pptxMohamedAbdi347025
This document provides an overview of accounting concepts including the framework, objectives, and standards of accounting. It defines accounting as recording, classifying, and summarizing financial transactions and events. The key objectives of accounting are to systematically record transactions, ascertain financial results and position, and provide information to decision makers. International standards like IFRS and domestic standards like US GAAP aim to standardize accounting policies for consistency and comparability.
This document discusses the objectives and characteristics of financial accounting and reporting. It provides information on:
- The key objective of financial reporting is to provide useful information to present and potential equity investors and creditors.
- International standard setting is led by the International Accounting Standards Board (IASB), which issues International Financial Reporting Standards (IFRS) used in over 115 countries.
- There are ongoing efforts toward convergence between IFRS and US GAAP standards to eliminate major differences in accounting treatments over time. Both standard setters use due process and seek input from stakeholders.
The document provides an overview of the basis of Islamic accounting theory. It discusses accounting and its environment, objectives of accounting, and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). Some key differences between conventional and Islamic accounting are highlighted, such as Islamic accounting being based on ethical Sharia law versus commercial law, and its focus on full disclosure and public accountability rather than limited disclosure and personal accountability. The objectives of Islamic accounting are to identify both socio-economic and religious events/transactions and ensure transactions are fair and just according to Sharia principles.
This document provides an overview of financial accounting and reporting standards. It discusses how financial accounting provides information to external users like investors and creditors to help them make investment and lending decisions. The key financial statements of balance sheet, income statement, statement of cash flows, and statement of shareholders' equity are outlined. The development of accounting standard setting bodies in the U.S. like the FASB and efforts to converge U.S. GAAP with international IFRS standards are summarized. The role of auditors in encouraging high-quality financial reporting and reforms like the Sarbanes-Oxley Act are also briefly described.
This presentation is about corporate financial reporting and it covers the following topics under it :
- Meaning
- Objectives
- Purpose
- Advantages
- Meaning of Annual Report
- Content of Annual Report
This document provides an overview of topics, questions, and cases related to accounting standards and financial reporting. It includes:
1. An assignment classification table that matches topics in the chapter to related questions and cases.
2. An assignment characteristics table that describes different accounting cases, their level of difficulty, and estimated time to complete.
3. The answers to several questions about the objectives of financial reporting, the role of standards-setting bodies like the FASB and SEC, and the process for developing accounting standards.
The document provides an introduction to financial statements and auditing. It discusses the purpose of financial statements, which is to provide useful information to users for economic decision making. It outlines the main users of financial statements and their interests. It also explains the need for auditing. Auditing verifies that financial statements are true and fair, and complies with reporting standards. It ensures the principal, or shareholders, have reliable information from the directors about the company's financial position and performance.
This document provides an overview of international standards on auditing. It defines an audit and discusses the role of auditing in enhancing the usefulness and credibility of financial statements. It then describes several key organizations that affect the accounting profession, including: the International Accounting Standards Board which establishes IFRS; the International Auditing and Assurance Standards Board which issues International Standards on Auditing; and the Public Company Accounting Oversight Board which oversees auditors of public companies in the US. It also summarizes different types of audits and describes the hierarchy within typical auditing firms.
This document provides an overview of international standards on auditing. It defines an audit and discusses the role of auditing in enhancing the usefulness and credibility of financial statements. It then describes several key organizations that affect the accounting profession, including the International Accounting Standards Board (IASB) which establishes International Financial Reporting Standards (IFRS), the International Federation of Accountants (IFAC), and the Financial Accounting Standards Board (FASB). The document also discusses the International Auditing and Assurance Standards Board (IAASB) which issues International Standards on Auditing (ISAs) and other standards, as well as the Public Company Accounting Oversight Board (PCAOB) which oversees auditors of public companies
This chapter discusses financial accounting and accounting standards. It identifies the major financial statements and objectives of financial reporting. It explains how accounting assists with efficient allocation of resources and identifies challenges facing accounting. It also describes the standard setting bodies like FASB and GASB, the standard setting process, and major pronouncements. Additionally, it discusses international accounting standards and the expectations gap between public perception and the accounting profession.
This chapter discusses financial accounting and accounting standards. It identifies the major financial statements and objectives of financial reporting. It explains how accounting assists with efficient allocation of resources and identifies challenges facing accounting. It also describes the standard setting bodies like FASB and GASB, the standard setting process, and major pronouncements. Additionally, it discusses international accounting standards and the expectations gap between public perception and the accounting profession.
This chapter discusses financial accounting and accounting standards. It identifies the major financial statements and objectives of financial reporting. It explains how accounting assists with efficient allocation of resources and identifies challenges facing accounting. It also describes the standard setting bodies like FASB and GASB, the standard setting process, and major pronouncements. Additionally, it discusses international accounting standards and the expectations gap between public perception and the accounting profession.
This document provides information about the course "Financial Accounting for Managers". The course code is MBA203C11 and it is worth 3 credits. The objectives of the course are to familiarize students with accounting concepts and principles and their implications for managers. It also aims to develop students' skills in reading and interpreting financial statements. The learning outcomes are to analyze business transactions, construct financial statements, appraise and interpret financial statements, and create accounting information using accounting systems. The course syllabus covers 4 units - introduction to accounting, preparation of financial statements, analyzing and interpreting financial statements, and accounting information systems.
The Financial Accounting Standards Board (FASB) establishes generally accepted accounting principles (GAAP) in the United States. It works with organizations like the Financial Accounting Foundation, Financial Accounting Standards Advisory Council, Securities and Exchange Commission, and American Institute of Certified Public Accountants to develop accounting standards through a multi-step process. This process involves adding projects, conducting research, issuing exposure drafts, and finalizing new standards to improve the usefulness of financial reporting for investors and other users of financial statements.
This document provides an introduction and overview of key concepts related to finance and financial statements. It discusses the components and purpose of the main financial statements: the income statement, balance sheet, and cash flow statement. The income statement measures financial performance and profit, the balance sheet measures financial position through assets, liabilities, and equity, and the cash flow statement shows actual cash inflows and outflows. Financial statements are prepared according to accounting standards and principles and are used by various stakeholders to evaluate a business's performance and financial position over time.
Accounting provides information about resource amounts, financing sources, and results of resource use. It does so for internal and external users of both profit and nonprofit organizations. There are four main types of accounting: operating, financial, management, and tax accounting. Financial accounting follows common rules to provide standardized information to external users like investors. Management accounting is tailored for internal planning, implementation, and control functions. Tax accounting prepares tax returns according to tax rules, which can differ from financial accounting rules.
The document discusses the role and activities of the International Federation of Accountants (IFAC), which is the global organization for the accountancy profession with over 2.5 million members. IFAC works to develop high-quality international standards, strengthen professional accountancy organizations, and promote the value of accountants worldwide. It does this through various boards and committees that establish standards and guidance on issues like auditing, ethics, education, and sustainability reporting.
This document discusses corporate governance in India. It notes that in the decades after independence, India adopted socialist policies that stifled corporate growth and bred corruption. The situation deteriorated further as tax rates encouraged creative accounting and DFIs provided loans but had little oversight over companies. Overall, corporate governance was weak in India with non-transparent practices and a lack of accountability.
The document discusses corporate governance in India and regulations by the Securities and Exchange Board of India (SEBI). It provides background on corporate governance and defines it. It outlines how corporate governance norms and practices in India have evolved, especially after economic reforms in the 1990s. It describes SEBI's role in establishing regulations like Clause 49 to strengthen corporate governance at listed companies in India and protect investors. The regulations address requirements around independent directors, board practices, auditing, whistleblowing and disclosures. The conclusion states that as Indian companies compete globally, adhering to strong corporate governance practices is essential.
The chapter discusses the efficient market hypothesis, which proposes that stock prices fully reflect all available information. It defines different forms of market efficiency and reviews evidence that stock prices follow a random walk. Studies found little correlation between daily or weekly stock price changes, supporting the idea that new information arrives randomly. The market is argued to be efficient if current prices quickly incorporate all public information.
1) Traditional corporate finance theory holds that the objective of the firm is to maximize stockholder wealth by maximizing the stock price. However, in practice managers do not always act in the best interests of stockholders.
2) Mechanisms meant to discipline management, such as annual meetings and boards of directors, are not always effective. Boards are often comprised of directors with close ties to management who lack incentives to challenge managers.
3) When stockholders have little control over managers, managers may pursue their own interests over stockholder interests through actions like greenmail or generous golden parachutes without stockholder approval.
Business ethics examines ethical principles and problems that arise in business. It applies to all aspects of business conduct including product quality, financial transparency, workplace safety, environmental issues, and legal compliance. Public interest in business ethics has increased in recent decades. Key ethical issues involve relationships between employees and employers, companies and customers, companies and shareholders, and companies and the public/community. Business ethics defines good and bad practices within a moral duty context. It has descriptive and normative branches concerning what currently exists and what should exist regarding morality. Values, morals, and ethics guide decisions about right and wrong in business.
This document provides an overview of financial accounting and reporting. It defines accounting and outlines its key features. It discusses the users of accounting information like investors, creditors, and managers. It describes the key financial statements - the balance sheet, income statement, and statement of cash flows. It also discusses the roles of auditors, the SEC, FASB, GASB, EITF, AICPA, AAA, IRS and IASB in establishing accounting standards and ensuring compliance. It concludes with a definition of GAAP as the standards recognized by the SEC for preparing financial statements for public companies.
The document discusses the objective of maximizing firm value in corporate finance. It notes that traditional theory holds that managers should maximize stockholder wealth by investing in projects with returns above the hurdle rate, using financing that minimizes costs, and returning excess cash to shareholders. However, it also discusses criticisms of this view and how managers' interests may diverge from stockholders in practice, as stockholders have limited control over managers.
This document discusses corporate governance in India and regulations from the Securities and Exchange Board of India (SEBI). It begins with introducing corporate governance and defining it. It then discusses the development of corporate governance norms and practices in India. It outlines SEBI's role in establishing rules and regulations for corporate governance, particularly Clause 49, for publicly listed companies. Clause 49 focused on increasing board independence and transparency around financial disclosures, related party transactions, and internal controls. The document concludes that as Indian companies compete globally, strong corporate governance aligned with international standards has become increasingly important.
This document discusses corporate governance in India. It begins by providing context on the state of corporate governance in India prior to reforms, noting issues like managing agency systems, licensing requirements, corruption, and ineffective oversight. It then discusses current weaknesses in corporate governance in India, including related party transactions, board independence, and enforcement. The document concludes by recommending improvements like increasing board independence, separating CEO and chairperson roles, strengthening shareholder rights and enforcement, and improving transparency and disclosure.
The document discusses corporate governance in India and regulations by the Securities and Exchange Board of India (SEBI). It defines corporate governance and outlines its importance. It describes SEBI's role in establishing rules and regulations for listed companies in India, including Clause 49 which mandates rules for boards of directors, audit committees, whistleblower policies, and financial disclosures. The changes aim to increase transparency and protect investors as Indian companies compete globally.
The chapter discusses the efficient market hypothesis, which states that stock prices fully reflect all available information. It begins by reviewing the concept of net present value. It then covers random walk theory, where stock prices are said to follow a random walk without predictable patterns. Evidence for market efficiency comes from studies finding stock prices adjust rapidly to new information. While markets are mostly efficient, some puzzles and anomalies exist that are not fully explained.
Here are a few key considerations in evaluating this opportunity:
- The $100,000 annual loss is a quantifiable cost to Disney that will reduce firm value. However, there are also social benefits to opening the store that do not accrue directly to Disney.
- Creating employment in an area of high unemployment could have significant social value by improving lives and economic conditions in the community. This may indirectly benefit Disney over the long-run by helping grow a customer base.
- Revitalizing the neighborhood may have spillover effects that are difficult to quantify but could benefit Disney and society. A thriving community could attract other businesses.
- There is a risk the store underperforms expectations and losses are greater than estimated
The document discusses the objective of maximizing firm value in corporate finance. It notes that traditional theory holds that the objective is to maximize stockholder wealth by maximizing stock price. However, it also discusses some criticisms of this view, such as the fact that maximizing stock price does not necessarily conflict with meeting other stakeholder needs. It also examines how the classical objective function of maximizing stockholder wealth through efficient markets can break down in practice due to issues like managers prioritizing their own interests over stockholders and significant social costs not being fully reflected in stock prices.
Business ethics examines ethical principles and problems that arise in business. It applies to all aspects of business conduct including product quality, financial transparency, workplace safety, environmental issues, and legal compliance. Public interest in business ethics has increased in recent decades. Key ethical issues involve relationships between employees and employers, companies and customers, companies and shareholders, and companies and the public/community. Business ethics defines good and bad practices and behaviors within a moral duty framework. It has both descriptive and normative branches regarding what currently exists and what should exist. Values, morals, and ethics guide individual and organizational decisions and actions.
1. The document discusses various types of salaries, allowances, and perquisites received by government and non-government employees and their tax treatment.
2. It provides details on tax exemption limits and calculations for leave encashment, gratuity, pension received during employment or post-retirement, voluntary retirement compensation, and retrenchment compensation.
3. The document also summarizes different types of allowances received by employees, specifying which allowances are fully or partially tax exempt and which allowances are fully taxable. Exemption limits are provided for various allowances.
4. Finally, it lists various common perquisites provided to employees and whether they are taxable or non-taxable. Exceptions
The document discusses different leadership styles:
1. Positive style uses rewards to motivate followers to work hard.
2. Negative style uses penalties to motivate followers through punishments if standards aren't met.
3. Autocratic/authoritarian style gives full power to leaders to make decisions without follower input. It can provide strong motivation but also causes frustration and low morale.
4. Democratic/participative style shares decision making through leader consultation with followers, allowing for new ideas but also taking more time.
5. Free-rein style gives full authority to followers to make their own decisions without leader motivation or guidance.
This document discusses various leadership styles:
- Autocratic, bureaucratic, democratic, and laissez-faire are some basic styles discussed. When each is most/least effective is outlined.
- Other styles covered include transformational, transactional, creative, corrective, change, intelligence, multicultural, pedagogical, servant, bridging, and purposeful leadership.
- Each additional style is defined in 1-2 sentences and examples of when they may be most effective are provided.
The document discusses investment and different types of investments such as shares, real estate, insurance, and bonds. It defines investment as using money to make more money by purchasing assets or resources to increase their value. Speculation is defined as purchasing assets seeking short-term profit from price movements, while investment is purchasing high-quality assets for long-term holding. Options are introduced as a type of derivative security whose prices are based on underlying securities. There are two main types of options: call options, which give the holder the right to purchase an asset at a set price by a certain date, and put options, which give the holder the right to sell an asset at a set price by a certain date.
The document outlines five elements that are important for developing an effective leadership strategy: 1) having a clear leadership mission or purpose, 2) choosing goals where you can have the greatest impact, 3) setting objectives to measure success, 4) determining the best strategy to achieve goals and objectives, and 5) creating action plans to implement the strategy. Developing these five elements brings together a workable leadership approach.
A leader should possess several key qualities according to Henry Fayol, including physical and mental strength to handle long hours and complex problems, emotional stability to make rational decisions without bias, strong communication and guidance skills to effectively direct followers, technical knowledge of their field, and the ability to motivate followers. A good leader also understands human psychology, develops their workers' skills, and maintains goodwill through fairness and consideration of followers' needs and expectations. Possessing these qualities helps a leader gain acceptance and effectiveness.
Unlocking WhatsApp Marketing with HubSpot: Integrating Messaging into Your Ma...Niswey
50 million companies worldwide leverage WhatsApp as a key marketing channel. You may have considered adding it to your marketing mix, or probably already driving impressive conversions with WhatsApp.
But wait. What happens when you fully integrate your WhatsApp campaigns with HubSpot?
That's exactly what we explored in this session.
We take a look at everything that you need to know in order to deploy effective WhatsApp marketing strategies, and integrate it with your buyer journey in HubSpot. From technical requirements to innovative campaign strategies, to advanced campaign reporting - we discuss all that and more, to leverage WhatsApp for maximum impact. Check out more details about the event here https://events.hubspot.com/events/details/hubspot-new-delhi-presents-unlocking-whatsapp-marketing-with-hubspot-integrating-messaging-into-your-marketing-strategy/
The Most Inspiring Entrepreneurs to Follow in 2024.pdfthesiliconleaders
In a world where the potential of youth innovation remains vastly untouched, there emerges a guiding light in the form of Norm Goldstein, the Founder and CEO of EduNetwork Partners. His dedication to this cause has earned him recognition as a Congressional Leadership Award recipient.
AI Transformation Playbook: Thinking AI-First for Your BusinessArijit Dutta
I dive into how businesses can stay competitive by integrating AI into their core processes. From identifying the right approach to building collaborative teams and recognizing common pitfalls, this guide has got you covered. AI transformation is a journey, and this playbook is here to help you navigate it successfully.
The Steadfast and Reliable Bull: Taurus Zodiac Signmy Pandit
Explore the steadfast and reliable nature of the Taurus Zodiac Sign. Discover the personality traits, key dates, and horoscope insights that define the determined and practical Taurus, and learn how their grounded nature makes them the anchor of the zodiac.
NIMA2024 | De toegevoegde waarde van DEI en ESG in campagnes | Nathalie Lam |...BBPMedia1
Nathalie zal delen hoe DEI en ESG een fundamentele rol kunnen spelen in je merkstrategie en je de juiste aansluiting kan creëren met je doelgroep. Door middel van voorbeelden en simpele handvatten toont ze hoe dit in jouw organisatie toegepast kan worden.
Discover timeless style with the 2022 Vintage Roman Numerals Men's Ring. Crafted from premium stainless steel, this 6mm wide ring embodies elegance and durability. Perfect as a gift, it seamlessly blends classic Roman numeral detailing with modern sophistication, making it an ideal accessory for any occasion.
https://rb.gy/usj1a2
Cover Story - China's Investment Leader - Dr. Alyce SUmsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
Best Competitive Marble Pricing in Dubai - ☎ 9928909666Stone Art Hub
Stone Art Hub offers the best competitive Marble Pricing in Dubai, ensuring affordability without compromising quality. With a wide range of exquisite marble options to choose from, you can enhance your spaces with elegance and sophistication. For inquiries or orders, contact us at ☎ 9928909666. Experience luxury at unbeatable prices.
During the budget session of 2024-25, the finance minister, Nirmala Sitharaman, introduced the “solar Rooftop scheme,” also known as “PM Surya Ghar Muft Bijli Yojana.” It is a subsidy offered to those who wish to put up solar panels in their homes using domestic power systems. Additionally, adopting photovoltaic technology at home allows you to lower your monthly electricity expenses. Today in this blog we will talk all about what is the PM Surya Ghar Muft Bijli Yojana. How does it work? Who is eligible for this yojana and all the other things related to this scheme?
Prescriptive analytics BA4206 Anna University PPTFreelance
Business analysis - Prescriptive analytics Introduction to Prescriptive analytics
Prescriptive Modeling
Non Linear Optimization
Demonstrating Business Performance Improvement
[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This presentation is a curated compilation of PowerPoint diagrams and templates designed to illustrate 20 different digital transformation frameworks and models. These frameworks are based on recent industry trends and best practices, ensuring that the content remains relevant and up-to-date.
Key highlights include Microsoft's Digital Transformation Framework, which focuses on driving innovation and efficiency, and McKinsey's Ten Guiding Principles, which provide strategic insights for successful digital transformation. Additionally, Forrester's framework emphasizes enhancing customer experiences and modernizing IT infrastructure, while IDC's MaturityScape helps assess and develop organizational digital maturity. MIT's framework explores cutting-edge strategies for achieving digital success.
These materials are perfect for enhancing your business or classroom presentations, offering visual aids to supplement your insights. Please note that while comprehensive, these slides are intended as supplementary resources and may not be complete for standalone instructional purposes.
Frameworks/Models included:
Microsoft’s Digital Transformation Framework
McKinsey’s Ten Guiding Principles of Digital Transformation
Forrester’s Digital Transformation Framework
IDC’s Digital Transformation MaturityScape
MIT’s Digital Transformation Framework
Gartner’s Digital Transformation Framework
Accenture’s Digital Strategy & Enterprise Frameworks
Deloitte’s Digital Industrial Transformation Framework
Capgemini’s Digital Transformation Framework
PwC’s Digital Transformation Framework
Cisco’s Digital Transformation Framework
Cognizant’s Digital Transformation Framework
DXC Technology’s Digital Transformation Framework
The BCG Strategy Palette
McKinsey’s Digital Transformation Framework
Digital Transformation Compass
Four Levels of Digital Maturity
Design Thinking Framework
Business Model Canvas
Customer Journey Map
SATTA MATKA DPBOSS KALYAN MATKA RESULTS KALYAN CHART KALYAN MATKA MATKA RESULT KALYAN MATKA TIPS SATTA MATKA MATKA COM MATKA PANA JODI TODAY BATTA SATKA MATKA PATTI JODI NUMBER MATKA RESULTS MATKA CHART MATKA JODI SATTA COM INDIA SATTA MATKA MATKA TIPS MATKA WAPKA ALL MATKA RESULT LIVE ONLINE MATKA RESULT KALYAN MATKA RESULT DPBOSS MATKA 143 MAIN MATKA KALYAN MATKA RESULTS KALYAN CHART
Discover the Beauty and Functionality of The Expert Remodeling Serviceobriengroupinc04
Unlock your kitchen's true potential with expert remodeling services from O'Brien Group Inc. Transform your space into a functional, modern, and luxurious haven with their experienced professionals. From layout reconfiguration to high-end upgrades, they deliver stunning results tailored to your style and needs. Visit obriengroupinc.com to elevate your kitchen's beauty and functionality today.
2. Definition of Accounting
“Accounting is a service activity. Its
function is to provide quantitative
information, primarily financial in nature,
about economic entities that is intended to
be useful in making economic decisions—in
making reasoned choices among alternative
courses of action.”
Statement of the Accounting Principles Board No. 4, par. 40.
1-2
3. Key Features of this Definition
Accounting—
• Provides a vital service in today’s business
environment.
• Is concerned primarily with quantitative
financial information that is used in
conjunction with qualitative evaluations in
making judgments.
• Information is used in making decisions
about how to allocate scarce resources.
• Information is intended to be useful in
making economic decisions about the
future.
1-3
4. Users of Accounting Information
• Stockholders are all parties
interested in the financial health of a
company.
• Internal users make decisions that
directly affect the internal operations
of the enterprise.
• External users make decisions
concerning their relationship to the
enterprise.
1-4
5. External Funding
1. Management accounting is
concerned primarily with financial
reporting for internal users, especially
management.
2. Financial accounting focuses on the
development and communication of
financial information for external
users.
1-5
6. Creditors need
information about
the profitability Investors (both
and stability of the existing
company to decide stockholders and
whether to lend potential investors)
money to the need information
company and, if concerning the
so, what interest safety and
rate to charge. profitability of their
investment.
1-6
7. Financial Reporting
The balance sheet
reports, as of a
certain point in
time, the resources
of a company (the
assets), the
company’s
obligations (the
liabilities), and the
equity of the
owners.
1-7
8. Financial Reporting
The income
statement reports,
for a certain interval,
the net assets
generated through
business operations
(revenues), the net
assets consumed
(the expenses), and
the difference (net
income).
1-8
9. Financial Reporting
The statement of
cash flows reports,
for a certain
interval, the amount
of cash generated
and consumed by a
company through
operating, financing,
and investing
activities.
1-9
11. Auditor’s Role
• Auditors, working independently of a
company’s management and internal
accountants, examine the financial
statements.
• They issue an auditor’s opinion
about the fairness of the statements
and their adherence to proper
accounting principles.
1-11
12. Securities Exchange
Commission (SEC)
• 1929 stock market crash blamed on
nonstandard accounting.
• 1933 Securities Act established SEC to
standardize accounting.
• Created to protect the interests of investors
by ensuring full and fair disclosure.
• Granted legal authority to establishing
GAAP.
• Has tended to defer setting GAAP to the
accounting profession.
1-12
13. Financial Accounting
Standards Board (FASB)
• The private-sector body responsible for the
establishment of U.S. accounting standards
(also known as GAAP).
• Five full-time members are drawn from a
variety of backgrounds—auditing, corporate
accounting, financial services, and academia.
• Members are required to sever all connections
with their firms or institutions prior to
assuming membership on the Board.
• Appointment of new members is done by the
Financial Accounting Foundation (FAF).
1-13
14. Governmental Accounting
Standards Board (GASB)
The FAF is also responsible for
selecting and supporting members
of GASB. The GASB was
established in 1984 and sets
financial accounting standards for
state and local government
entities.
1-14
15. The Standard-Setting Process
• The major functions of the FASB are to
study accounting issues and to establish
accounting standards.
• These standards are published as
Statements of Financial Accounting
Standards.
• The FASB has also issued Statements of
Financial Accounting Concepts that
provide a framework within which specific
accounting standards can be developed.
1-15
16. FASB “Due Process”
1. FASB staff assembles background information.
2. The Board holds public meetings before a
decision is made to add a project to the FASB’s
formal agenda.
After more study and further hearings, the
Board often issues a report summarizing its
Preliminary Views.
Interested parties are invited to comment either
in writing or orally at a public hearing.
After comments from interested parties have
been evaluated, the Board meets as many times
as necessary to resolves the issues.
(continues) 1-16
17. FASB “Due Process”
From these meetings, the Board developes an
Exposure Draft of a statement that includes
specific recommendations for financial and
accounting reporting.
At the end of the exposure period, 30 days or
longer, all comments are viewed by the staff
and the Board.
Further deliberation by the Board leads to
either the issuance of a Statement of
Financial Accounting Standards (if at least
three of the members approve), a revised
Exposure Draft, or abandonment of the project.
1-17
18. Emerging Issue Task Force
In an effort to overcome the
methodical, sometimes slow,
nature of the standard setting
process, in 1984 the FASB
established the Emerging Issues
Task Force (EITF). The EITF
assists the FASB in the early
identification of emerging issues
that affect financial reporting.
1-18
19. Securities and Exchange
Commission (SEC)
• Created by an act of Congress in
1934.
• Primary role is to regulate the
issuance and trading of securities by
corporations to the general public.
• Requires companies to furnish various
financial statements and to have their
external financial statements audited
by independent accountants.
(continues)
1-19
20. Securities and Exchange
Commission (SEC)
• It is vitally interested in financial
reporting and the development of
accounting standards.
• It brings to the Board’s attention
emerging problems that need to be
addressed and sends observers to meet
with the EITF.
• It occasionally issues Staff Accounting
Bulletins (SABs), which are SEC staff
interpretations.
1-20
21. American Institute of Certified
Public Accountants (AICPA)
• It is the professional organization of
practicing certified public accountants
(CPAs) in the United States.
• It is responsible for preparing and
grading the Uniform CPA Examination.
(continues)
1-21
22. American Institute of Certified
Public Accountants (AICPA)
• It is concerned with maintaining the
integrity of the profession through its
Code of Professional Conduct and
through a quality control program,
which includes a process of peer
review of CPA firms conducted by
other CPAs.
1-22
23. American Accounting
Association (AAA)
• The AAA is an organization of
accounting professors.
• It sponsors national and regional
meetings where accounting professors
discuss technical research and share
teaching techniques and materials.
• It organizes working committees of
professors to study and comment on
accounting standards issues.
(continues) 1-23
24. American Accounting
Association (AAA)
• The AAA publishes a number of
academic journals, including The
Accounting Review and Accounting
Horizons.
• It motivates and facilitates curriculum
revision to keep pace with the changes
in the accounting profession.
1-24
25. Internal Revenue Service (IRS)
• The IRS has the primary goal of
equitably collecting revenue.
• Although not the same, there are
many areas where tax and financial
accounting are closely related.
1-25
28. International Accounting
Standards Board (IASB)
• Formed in 1973 to develop worldwide
accounting standards.
• Similar to FASB, IASB develops proposals,
circulates these among interested
organizations, receives feedback, and then
issues a final pronouncement.
• Board members are representatives from
the United States, the United Kingdom,
France, Sweden, China, Australia, South
Africa, and Japan.
(continues)
1-28
29. International Accounting
Standards Board (IASB)
• Accounting standards issued by the IASB
are referred to as International Financial
Reporting Standards (IFRSs) if issued
since to 2001 and International
Accounting Standards (IASs) if issued
prior to 2001.
1-29
30. Conceptual Framework
• A strong theoretical foundation is essential
if accounting practice is to keep pace with a
changing business environment.
• The conceptual framework plays a vital
role in the development of new standards
and in the revision of previously issued
standards.
• A conceptual framework provides a guide
for future practice.
1-30
31. Concepts Statements
• In 2000, FASB issued seven Statements of
Financial Accounting Concepts, which
addressed four major areas:
– Objectives: What are the purposes of financial
reporting?
– Qualitative characteristics: What are the
qualities of useful financial information?
– Elements: What is an asset? a liability? a
revenue? an expense?
– Recognition, measurement, and reporting:
How should the objectives, qualities and
elements definitions be implemented?
1-31
32. Objectives of Financial
Reporting
Usefulness
Financial reporting should
provide information that is useful
to present and potential investors
and creditors and other users in
making rational investment,
credit, and similar decisions.
Statement of Financial Accounting Concepts No. 1, par. 34.
1-32
33. Objectives of Financial
Reporting
Understandability
Financial reporting should provide
information that is understandable
to one who has a reasonable
knowledge of accounting and
business and who is willing to
study and analyze the information
presented.
Statement of Financial Accounting Concepts No. 1, par. 34.
1-33
34. Objectives of Financial
Reporting
Target Audience:
Investors and Creditors
While there are many potential
users of financial reports, the
objectives are directed primarily
toward investors and creditors.
1-34
35. Objectives of Financial
Reporting
Assessing Future Cash Flows
Financial reporting should provide
information that is useful in
assessing amounts, timing, and
uncertainty (risk) of prospective
cash flows.
1-35
36. Objectives of Financial
Reporting
Evaluating Economic Resources
Financial reporting should also
provide information about a
company’s assets, liabilities, and
owners’ equity to help investors,
creditors, and others evaluate the
financial strengths and
weaknesses of the enterprise and
its liquidity and solvency. 1-36
37. Objectives of Financial
Reporting
Primary Focus on Earnings
Information about company
earnings, measured by accrual
accounting, generally provides a
better basis for forecasting future
performance than does
information about current cash
receipts and disbursements.
1-37
38. Qualitative Characteristics of
Accounting Information
Benefits Greater Than Costs
The information must be worth
more than the cost of producing
it.
1-38
39. Qualitative Characteristics of
Accounting Information
Relevance
The information must “make a
difference.” It must carry the
qualities of:
• Feedback value
• Predictive value
• Timeliness
1-39
40. Qualitative Characteristics of
Accounting Information
Relevance
Relevant information normally
provides both feedback value
and predictive value at the
same time.
1-40
41. Qualitative Characteristics of
Accounting Information
Relevance
Timeliness is essential for
information to “make a
difference” because if the
information becomes available
after the decision is made, it
isn’t of much use.
1-41
42. Qualitative Characteristics of
Accounting Information
Reliability
The information must be relatively
free from error and represent what
it claims to represent. It must
have:
• Verifiability
• Representational faithfulness
• Neutrality
1-42
43. Qualitative Characteristics of
Accounting Information
Reliability
Verifiability implies consensus.
Representational faithfulness
means that there is agreement
between a measurement and the
economic activity or item that is
being measured. Neutrality is
similar to the concept of fairness.
1-43
44. Qualitative Characteristics of
Accounting Information
Comparability
The information must be
relatable to a benchmark or
standard. The comparison may
be with data for other firms or
it may be with similar
information for the same firm
but for other periods of time.
1-44
45. Qualitative Characteristics of
Accounting Information
Materiality
Is the item large enough to
influence the decision of a user of
information? Quantitative
guidance concerning materiality
is lacking, so managers and
accountants must exercise
judgment in determining whether
an item is material.
1-45
46. Qualitative Characteristics of
Accounting Information
Conservatism
The concept of conservatism
can be summarized as follows:
When in doubt, recognize all
losses but don’t recognize any
gains.
1-46
47. Recognition
• Recognition—Taking all the estimates and
judgments into one number and using that
number to make a journal entry.
• Recognition Criteria—For an item to be
formally recognized, it must meet one of the
definitions of the elements of the financial
statements.
– For example, revenue must meet the
definition of revenue to be recorded and
reported on the income statement.
• Disclosure—Skipping the journal entry and
just relying on the note to convey the
information to users. 1-47
48. Measurement
Five measurement attributes are:
1. Historical cost
2. Current replacement cost
3. Fair value
4. Net realizable value
5. Present (or discounted) value
1-48
49. Reporting
Included in the recommended set of
general-purpose financial statements are
reports that show the following:
• Financial position at the end of the
period
• Earnings (net income) for the period
• Cash flows during the period
• Investments by and distributions to
owners during the period
• Comprehensive income for the period
1-49
51. Full Disclosure Principle
For financial statements to be
most effective, all relevant
information should be presented
in an unbiased, understandable,
and timely manner. This is
sometimes referred to as the full
disclosure principle.
1-51
52. Traditional Assumptions
The FASB conceptual framework is
influenced by five basic assumptions.
1. Economic entity
2. Going concern
3. Arm’s-length transactions
4. Stable monetary unit
5. Accounting period
1-52
53. Traditional Assumptions of
the Accounting Model
Economic Entity
The business enterprise is viewed
as a specific economic entity
separate and distinct from its
owners and any other business
unit.
1-53
54. Traditional Assumptions of
the Accounting Model
Going Concern
In the absence of evidence to the
contrary, the entity is viewed as a
going concern. In other words, it
is assumed that the enterprise
will last indefinitely.
1-54
55. Traditional Assumptions of
the Accounting Model
Arm’s-Length Transactions
Transactions are assumed to
occur between independent
parties, each of which is capable
of protecting its own interests.
1-55
56. Traditional Assumptions of
the Accounting Model
Stable Monetary Unit
The stable monetary unit
assumption allows for the
ignoring of changes in the dollar’s
purchasing power resulting from
inflation.
1-56
57. Traditional Assumptions of
the Accounting Model
Accounting Period
Because accounting information
is needed on a timely basis, the
life of a business is divided into
specific accounting periods,
usually one year.
1-57
58. Careers in Financial
Accounting
Public Accounting
Pubic accountants do not work for a
single business enterprise. Rather,
they provide a variety of services for
many different individuals and
business clients.
1-58
59. Careers in Financial
Accounting
Corporate Accounting
A large business enterprise employs
financial accountants who are
primarily concerned with external
financial reporting, management
accountants who are primarily
concerned with internal financial
reporting, and tax accountants.
1-59
60. Careers in Financial
Accounting
User (Analyst, Banker, Consultant)
Many students take accounting in
preparation for becoming a user of
financial statements. Credit
analysts, investment bankers,
brokers, and business consultants
need a strong working knowledge of
accounting as well as strong skills
in information technology.
1-60