The discussion in this area will revolve around what accounting is, who the key parties in the financial reporting process are, the role of generally accepted accounting principles in the preparation of financial statements, and the regulatory environment of financial reporting in the U.S. The information being discussed here will be found partly in chapter 1 and partly in chapter 2.
Let's begin by discussing what accounting is. Anybody?
The Sarbanes-Oxley Act is a 2002 U.S. federal law which establishes a broad array of standards for public companies, their management boards, and accounting firms. It was passed after a series of accounting scandals at Enron, WorldCom and Tyco International diminished public trust in U.S. corporations, and is designed to increase corporate accountability. The law established the Public Company Accounting Oversight Board (PCAOB), which oversees the auditors of public companies. Sarbanes-Oxley sets forth eleven specific reporting requirements that companies and executive boards must follow, and requires the Securities and Exchange Commission (SEC) to oversee compliance.
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Hmmm. What is Accounting? In definition by BusinessDictionary.com, it is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. With our new baby arrival, I went through our expenses and income to determine if we can afford a new car with more spaces. It was one important decision to make since it involves years of financial obligation and I certainly applied accounting process to make the important decision. In business, it's hard to find where accounting is NOT involved. Purchasing, hiring, advertising,,,, I cannot think of one that does not involve accounting activity. I believe the key to success in any business, it is important to keep accounting accurately and available in order...