ACG for Decision-Makers Chap 1.
auditing definition: the process of (blank) of an entity by an independent third party with the objective of (blank) about the fairness of the presentation of the entity's (blank), results of (blank), changes in (blank) and (blank).
the process of examining the financial statements of an entity by an independent third party with the objective of expressing an opinion about the fairness of the presentation of the entity's financial position, results of operations, changes in financial position and cash flows.
The Definition of Accounting is
the process of identifying, measuring, and communicating financial info about an organization (entity) for the purpose of making decisions and informed judgements
Users of Accounting info are:
Management: for planning, directing, and controlling Investors/shareholders: when deciding to invest or not creditors/suppliers: When determining how much merch to ship or money to loan to a customer employees: to know job stability, long-term job opportunity, or retirement benefits SEC: analysts determine whether financial statements fully disclose all required info
6 Types of Accounting
Financial accounting, managerial accounting/cost accounting, auditing, internal auditing, governmental and not-for-profit accounting, income tax accounting
pivotal years in the development of accounting in America
The Securities Acts of 1933, & 1934
Financial Reporting is designed to meet the needs of users by providing information that is:
relevant to making rational investment and credit decisions and other informed judgements.
