Acct 230 1st Edition Lecture 4 Outline of Last Lecture II Accounting Information Decision Making a Accounting as a Measurement Communication Process Outline of Current Lecture III Accounting Information Decision Making a Financial Accounting Information Current Lecture II Accounting Information Decision Making a Financial Accounting Information i Importance of Financial Accounting 1 Financial accounting information is essential to making good business decisions ii Rules of Financial Accounting 1 Current Standard Setting a US FASB Financial Accounting Standard Board i Governed by Securities and Exchange Commission SEC b Global International Accounting Standards Board 2 Role of Auditors a Auditors are trained individuals hired by a company as an independent party to express a professional opinion of the accuracy of that company s financial statements b Help ensure that management has in fact appropriately applied GAAP in preparing the company s financial statements c Help investors and creditors in their decisions by adding credibility to the financial statements 3 Objectives of Financial Accounting a Financial accounting should provide information that i Is useful to investors and creditors in making decisions ii Helps predict cash flow These 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 iii Tells about economic resources claims to resources and changes in resources and claims 4 An ethical foundation a Ethics refers to a code or moral system that provides criteria for evaluating right and wrong behavior 5 Sarbanes Oxley Act SOX a This act provides regulation of auditors and the types of services they furnish to clients increases accountability of corporate executives addresses conflicts of interest for securities analysts and provides stiff criminal penalties for violators
View Full Document
Unlocking...