Acct 230 1st Edition Lecture 4 Outline of Last Lecture II. Accounting Information & Decision Makinga. Accounting as a Measurement/Communication ProcessOutline of Current Lecture III. Accounting Information & Decision Makinga. Financial Accounting InformationCurrent LectureII. Accounting Information & Decision Makinga. Financial Accounting Informationi. Importance of Financial Accounting1. Financial accounting information is essential to making good business decisionsii. Rules of Financial Accounting1. Current Standard Settinga. US – FASB – Financial Accounting Standard Boardi. Governed by Securities and Exchange Commission (SEC)b. Global – International Accounting Standards Board2. Role of Auditorsa. 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 statementsc. Help investors and creditors in their decisions by adding credibility to the financial statements.3. Objectives of Financial Accountinga. Financial accounting should provide information that:i. Is useful to investors and creditors in making decisionsii. Helps predict cash flowThese 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 claims4. An ethical foundationa. 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
View Full Document
Unlocking...