MGMT 105 1st Edition Lecture 25Outline of Last Lecture I. Managing Information for Better Business DecisionsOutline of Current Lecture I. The Financial System and Issues in Financial Management - Controller: person who manages all of a firm’s accounting- Financial Accounting: concerned with external users- Managerial Accounting: concerned with internal users- Audit: examination of a company’s accounting system to determine whether its financial reports are reliable or not- Private Accountant: salaried accountant hired by a business to carry out itsday-to-day financial functions- Forensic Accountant: training to practice for legal purposes - Certified Fraud Examiner (CFE): professional designation in recognition of qualifications for a specialty area within forensic accounting - Sarbanes-Oxley Act of 2002o Sox: to restore public trust in a company to not be fraudulent Sox requires CEO and CFO have to certify financial records are reliable If clients and auditors falsify, destroy, alter, or conceal records they go to prison for 10 years- Accounting Equationo Assets = Liability + Owner’s Equity Assets: anything of value (bike) Liability: debt that you owe Owner’s Equity: amount of money that owners would receive ifthey sold all of a firm’s assets and paid all of its liabilities- Balance Sheet: financial statement that contains assets, liability, and owner’s equity- Current Asset: anything that can be converted into cash within a year- Fixed Asset: asset with long-term use or value, such as land, buildings, andequipment- Liquidity: ease with which an asset can be converted into cash- Depreciation: accounting method for distributing the cost of an asset over its useful life- Current Liability: debts have to pay within a year (tuition for a student)- Long-Term Liability: debt that’s not due for at least a year (loan for students)- Accounts Payable (Payables): current liability consisting of bills owed to suppliers (what you owe)- Retained Earnings: earnings retained by a firm for its use rather than paid out as dividends - Income Statement: profit (or loss): Revenues – Expenses- Budget: estimate of receipts and
View Full Document
Unlocking...