Chapter 1-1 What is Financial Accounting? What is Financial Accounting? “Language of Business”: (1) the identification, measurement, and communication of financial information about (2) economic entities to (3) (3) interested interested parties parties.
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Wiley - Chapter 1: Financial Accounting and Accounting Standards
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Chapter 1-1
What is Financial Accounting?What is Financial Accounting?What is Financial Accounting?What is Financial Accounting?
“Language of Business”:
(1) the identification, measurement, and communication of financial information about
(2) economic entities to
(3)(3) interestedinterested partiesparties.
Chapter 1-2
Accounting and Capital Allocation Accounting and Capital Allocation Accounting and Capital Allocation Accounting and Capital Allocation
Resources are limited. Efficient use of resources often determines whether a business thrives. Resources are limited. Efficient use of resources often determines whether a business thrives.
Financial Financial
ReportingReporting
Financial Financial
ReportingReporting
Information to help Information to help
users with capital users with capital
allocation decisions.allocation decisions.
UsersUsersUsersUsers
Primarily Investors & Primarily Investors &
creditors (present creditors (present
and potential)and potential)
Capital AllocationCapital AllocationCapital AllocationCapital Allocation
2. American Institute of CPAs2. American Institute of CPAs2. American Institute of CPAs2. American Institute of CPAs
AICPA and Accounting Standards Executive Committee AcSEC (established by AICPA) no longer issues authoritative accounting and audit guidance for public companies.
Government oversight preferred following Sarbanes Oxley Act
PCAOB oversees the development of auditing standards.
AICPA continues to develop and grade the CPA examination and issue industry guides.
Mission to establish and improve standards of financial accounting and reporting.
Consult on major policy issues.
Chapter 1-10
Missions is to establish and improve standards of Missions is to establish and improve standards of financial accounting and reporting. Differences financial accounting and reporting. Differences between FASB and APB include:between FASB and APB include: