MANGMT 1010 1st Edition Lecture 7Outline of Last Lecture I. Definition of the Finance FunctionII. What are securitiesA. Security and exchange commission B. Investment banksIII. Common stockA. Investment traits of common stockIV. What is a bondA. Types of bondsV. Making choicesOutline of Current Lecture I. What is accounting II. Who uses accounting information?III. AccountantsIV. What is an auditV. The accounting equationCurrent LectureI. What is accounting? Accounting: a comprehensive system for collecting, analyzing and communicating financial informationBookkeeping: the recording of transactionsAccounting information system (AIS): An organized means by which is financial information is identified, measured, recorded and retained for use in accounting statements and management reports. II. Who uses accounting information1. Business Managers 2. Employees and Unions3. Investors and Creditors4. Tax Authorities 5. Government Regulatory AgenciesIII. Acountants- Financial Versus Managerial Accounting- Financial accounting system is concerned with external information usersThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Managerial accounting system serves internal users. - Controller: Person who manages all of a firmIV. What is an Audit?- Systematic examination of a company’s accounting system to determine whether its financial reports fairly represent its operationsV. The accounting equationASSETS = LIABILITIES + OWNERS’ EQUITY- Assets: any economic resource expected to benefit a firm or an individual who owns it.- Liability: a debt owned by a firm to an outside organization or individual- Owners’ equity: the amount of money that owners would receive if they sold all of a firm’s assets and paid all of its