This document provides an overview of accounting information and its uses. It discusses how accounting links decision makers with economic activities and the results of decisions. It describes the objectives and users of both external financial reporting and internal management accounting information. Finally, it outlines some common careers in the accounting field and emphasizes the importance of competence, judgment and ethical behavior for accounting professionals.

1. Copyright © 2012 The McGraw-Hill Companies, Inc.
PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA
Charles W. Caldwell, D.B.A., CMA
Jon A. Booker, Ph.D., CPA, CIA
Cynthia J. Rooney, Ph.D., CPA
McGraw-Hill/Irwin
Accounting
Accounting
Information for Decision Making
Information for Decision Making
otaleem.blogspot.com
otaleem.blogspot.com
for more presentation(follow me)
for more presentation(follow me)
Chapter 1

2. 1-2
Accounting
Information
The
Accounting
Process
Decision
Makers
Economic
Activities
Actions
(decisions)
Accounting links
decision makers
with economic
activities  and
with the results of
their decisions.
Reported
Results of
Actions
(decisions)

3. 1-3
Types of Accounting Information
Types of Accounting Information
Financial
Management
Tax

4. 1-4
Accounting Systems
Accounting Systems
An accounting system consists of the
personnel, procedures, technology, and
records used by an organization to
develop accounting information and to
communicate this information to decision
makers.

5. 1-5
Basic Functions of an Accounting
Basic Functions of an Accounting
System
System
 Summarize
and
communicate
information to
decision
makers.
 Classify
similar
transactions
into useful
reports.
 Interpret
and record
business
transactions.

6. 1-6
Components of Internal Control
Components of Internal Control
Control
Environment
Risk
Assessment
Control
Activities
Information and
Communication
Monitoring

7. 1-7
External Users of Accounting
External Users of Accounting
Information
Information
•Owners
•Creditors
•Potential investors
•Labor unions
•Governmental agencies
•Suppliers
•Customers
•Trade associations
•General public

8. 1-8
Provide specific information about
economic resources, claims to resources,
and changes in resources and claims.
Provide information useful in assessing
amount, timing and uncertainty of future
cash flows.
Provide general information useful in
making investment and credit decisions.
Objectives of External Financial
Objectives of External Financial
Reporting
Reporting

9. 1-9
Objectives of External Financial
Objectives of External Financial
Reporting
Reporting
The primary financial statements.
Balance
Sheet
Statement
of Cash
Flows
Income
Statement

10. 1-10
Characteristics of Externally
Characteristics of Externally
Reported Information
Reported Information
A Means to an
End
A Means to an
End
Broader than
Financial
Statements
Broader than
Financial
Statements
Historical in
Nature
Historical in
Nature
Results from Inexact and
Approximate Measures
Results from Inexact and
Approximate Measures
Based on General-
Purpose
Assumption
Based on General-
Purpose
Assumption
Usefulness
Enhanced via
Explanation
Usefulness
Enhanced via
Explanation

11. 1-11
Users of Internal Accounting
Users of Internal Accounting
Information
Information
Board of directors
Chief executive officer (CEO)
Chief financial officer (CFO)
Vice presidents
Business unit managers
Plant managers
Store managers
Line supervisors

12. 1-12
Objectives of Management
Objectives of Management
Accounting Information
Accounting Information
To help achieve
goals and
missions
To help achieve
goals and
missions
To help evaluate
and reward
decision makers
To help evaluate
and reward
decision makers

13. 1-13
Characteristics of Management
Characteristics of Management
Accounting Information
Accounting Information
Timeliness
Timeliness
Identify
Decision Maker
Identify
Decision Maker
Oriented
Toward Future
Oriented
Toward Future
Measures of
Efficiency and
Effectiveness
Measures of
Efficiency and
Effectiveness
A Means to an
End
A Means to an
End

14. 1-14
Competence, Judgment and
Competence, Judgment and
Ethical Behavior
Ethical Behavior
Certified Public Accountant (CPA)
Certified Management Accountant (CMA)
Certified Internal Auditor (CIA)
Ethical behavior is the
cornerstone of the
accounting
profession.

15. 1-15
Careers in Accounting
Careers in Accounting
Public Accounting
Management Accounting
Governmental Accounting
Accounting Education

16. 1-16
End of Chapter 1
End of Chapter 1