E2-1 (a) Accounting rule-making that relies on a body of concepts will result in useful and consistent pronouncements. TRUE (b) General-purpose financial reports are most useful to company insiders in making strategic business decisions. FALSE. General-purpose financial reporting helps users who lack the ability to demand all the financial information they need from an entity and therefore must rely, at least partly, on the information provided in financial reports. However, an implicit assumption is that users need reasonable knowledge of business and financial accounting matters to understand the information contained in financial statements.
Accountants have ethical responsibilities to many different parties, both internal and external to the company. The AICPA is used as a foundation because it covers professional conduct, integrity and general standards accounting principles. The code provides an ethical outline that all CPA members must adhere to. Accounting rules, regulations, and codes exist to ensure that the information presented is accurate and faithful to the financial circumstances. The AICPA is recognized as an authoritative source used to clarify accounting principles by offering guidance on official standards, new developments, and specific advice for accountants.
A culture with strong ethical standards and code of conduct stemming from top management is key to preventing fraud; it is also cost-efficient to implement as a control. d. Audit Committee While not as cost-efficient as the other controls listed, there should be an audit committee appointed by the Board. It would be in charge of all financial oversight within the organization. For smaller organizations, they can attempt to recruit professional accountants to volunteer their time for the organization; in exchange, these accountants would be increasing their own reputation as well. Larger organizations might consider appointing an audit firm to audit their statements.
Full disclosure requires that publicly traded businesses use accrual based accounting and revenues are recognized as sales are earned. Full disclosure also requires that footnotes describe accounting procedures and provide details for unusual transactions. With companies such as Enron and WorldCom, the accounting field has an increased need for businesses to tell the truth in its financial statements. Full disclosure acts as the obligation for businesses to be truthful in its statements in order to protect the parties
Financial Statement Paper P Agnes Pierre Louis ACC/280 September 26, 2011 Minh Truong Financial Statement Paper In today’s business world it is required to keep an accurate account for assets and liabilities of each company. Good and ethical accounting practices can build the base for a strong and profitable company if the information is used properly. The definition of accounting is obvious but one most know the purpose of accounting which will be covered in the following paragraphs. There are four financial statements that are prepared by companies in today’s society as a form of reporting accounting companies. Those statements are income statement, retained earnings statement, balance sheet, and statement of cash flows.
Bonuses must be accounted for and properly publicized to shareholders. The business is usually located in the state that it does business. It can be registered in another state and do business elsewhere as long as business laws for the originating state are properly followed. A disadvantage of a C-Corporation is it requires attorneys and accountants to properly conduct business. Profits must be legally and accurately accounted for.
ALL WK 1, DQ’s: WK 1, DQ 1: What is a business’s obligation to build an ethical culture and balance its desire for profit with ethical responsibilities to employees, customers, society, and the environment? Ethics is different from one person to the next, so it is imperative that business clearly define the norm for staff members and management. The decisions organizations make influence more than business partners, affiliates, culture, and others. It is important for organizations center of attention on maximizing shareholder revenue. Therefore, maximizing profit without causing destruction to the business culture can be a balancing act for most organizations.
Organizational Structure MGT/230 October 30, 2012 It is important to be mindful of your company's organizational structure because it provides you with information regarding who has power and over whom, how and why a company divides the workload by particular people and by groups. Understanding your organizational structure can also provide important cross-functional relationships to organize work efforts for the best results. It can show where breakdowns can happen in the hierarchy and assist in growing results for better accountability. In this paper, the discussion will be on the organizational structure of Wal-Mart and compare their organizational structure to the organizational structures of two other companies, such as Target
Internal auditors guarantee that the internal controls are sufficient and calculate the company’s financial and information systems for accurateness. A series of audits such as financial statements, fraud, compliance, and operational can be made with the hiring of an internal auditor. The most beneficial audit for Whitfields Company would be an operational audit. Operational Audits can be done if upper-level management thinks that there is a need for operational improvements. It is a review of management and how operating procedures work.
In what specific ways do the two sets of standards differ from one another? GAAP (generally accepted accounting principles) is a general accepted accounting principles or sets of rules, accounting principles, and standards that are used in specific countries, regions or industries. The IFRS (International Financial Reporting Standards) purpose is to provide users with a reporting entity that is “useful to all stakeholders of the entity” (Veronique Weets, 2013) If the United States adopted IFRS standards, what would be the advantages and disadvantages? Some of the advantages of the United States adopting IFRS standards over GAAP are: number one, “the international accounting standards are vital to make allocating capital easier and more effective in the global scale” (Victor Smart, 2013). Number two because of the publication of the Norwalk Agreement in 2002, “both Financial Accounting Standards Board (FASB), converged with IFRS; the idea is to streamline the numbers of differences between (IFRS) and (US GAAP) requirements and “in addition to tightening up certain areas, the revision developed the previous (IFRS)” (Shan Kennedy, 21013) Disadvantages: “Presently, the widespread use of US GAAP rather than IFRS can create difficulties for financial analysts, given the challenges in making financial comparisons” (Veronique Weets, 2013).