True (f) The objective of financial reporting is the foundation from which the other aspects of the framework logically result. True E2-4 Instructions Identify the appropriate qualitative characteristic(s) to be used given the information provided below. (a) Qualitative characteristic being employed when companies in the same industry are using the same accounting principles. Comparability (b) Quality of information that confirms users’ earlier expectations. Confirmatory value (c) Imperative for providing comparisons of a company from period to period.
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.
These procedures will be similar to the ones utilized in the other cycles. First, the audit engagement team will understand the internal controls to formulate the audit objectives of occurrence, completeness, accuracy, and timing. Second, the team will design tests of controls and substantive tests of transactions to meet those objectives (Arens, Elder, & Beasley, 2014). The following question will address the objective of the audit with examinations of test of controls and substantive tests of transactions: Objective Questions Test of Controls Substantive Test of Transactions Is there proper authorization for the issues of new notes Review note agreements for board of directors and executive management signatures. Review cash receipts and disbursements for large changes or unusual amounts All notes are recorded?
Merliss wants to be sure that all reporting for this transaction is proper and transparent. The company asks you to research disclosure requirements related to its capital structure. A .Identify the authoritative literature that addresses disclosure of information about capital structure. Statement of Financial Accounting Standards (SFAS) No. 129 This statement sets standards for disclosing information about an entity’s capital structure.
However, we, as in AOW offer a couple of other types of audits, which is an operational audit, and a compliance audit. An operational audit evaluates all of the operating procedures for efficiency, and can include more than just accounting. The evaluation can include the organizational structure, computer operations, production methods, marketing, and any other area. A compliance audit can be helpful for staying in compliance with the Department of Labor by examining wage rates with wage laws among other areas. The financial statement audit is the one I will be concentrating on by examining the financials to be sure Apollo Shoes in compliance with the required US accounting standards.
The Chairman of the FASB is Leslie F. Seidman. b. What is the main purpose of FASB? The mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision useful information to investors and other users of financial reports. c. When was FASB created and why was it created?
Financial Statements ACC/290 For a successful business and effective performance of the company is necessary to know basic assumptions of the analysis of financial statements. Financial statements is the understanding that the analysis should be subjected to observation, testing, evaluation and formulation of a diagnosis process that took place in company and that as such, are summarized and embodied in the financial report. Financial analysis is exhaustive research quantification, description and evaluating the financial status and performance of business operations. Companies are required to at the end of each financial year, after all business changes its accounting records locked, in order to determine the exact and final state which has the purpose of compiling the financial statements. This report contains information on the financial position, performance and any changes affecting the financial position of
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
Accounting Principles & General Financial Ethical Standards Mark Bullock Acc/291 11-18-2013 John H Olarte Accounting Principles & General Financial Ethical Standards [pic] “Accounting and financial professionals must abide by ethical standards that regulate what kind of business they conduct, who they serve and how they use their skills. Ethical standards are determined largely by professional accounting and finance organizations and the Financial Accounting Standards Board. Small-business owners who plan to perform their own accounting services or hire accountants should be aware of accounting principles and general financial ethical standards so they can maintain a positive reputation for their businesses.” Ethics should always play a role in the businesses everyday life. Without ethics you really should think about closing your doors because it will eventually catch up with your company. Most companies live by the standards that G.A.A.P.
They rely on the opinion of the accountants who prepared the statements, as well as the auditors that verified it, to present a true and fair view of the company. STRATEGIES TO DEAL WITH ACCOUNTING AND FINANCIAL