Financial & Managerial Accounting-Chapter 1
balance sheet
(assets - liabilities = stockholder's equity)
statement of cash flows
(money flowing in and out of the business, categorized by use)
scope and nature of services
(principles of the code of professional conduct of the American Institute of Certified Public Accountants) a member in public practice should observe the principles of the code of professional conduct in determining the scope and nature of services to be provided. (24) (L01-7)
objectivity and independence
(principles of the code of professional conduct of the American Institute of Certified Public Accountants) a member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities. A member in public practice should be independent in fact and appearance when providing auditing and other attestation services. (24) (L01-7)
due care
(principles of the code of professional conduct of the American Institute of Certified Public Accountants) a member should observe the professions technical and ethical standards, strive continually to improve confidence in the quality of services, and discharge professional responsibility to the best of the members ability. (24) (L01-7)
responsibilities
(principles of the code of professional conduct of the American Institute of Certified Public Accountants) in carrying out their responsibilities as professionals, members should exercise sensitive professional and moral judgments in all their activities. (24) (L01-7)
the public interest
(principles of the code of professional conduct of the American Institute of Certified Public Accountants) member should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism. (24) (L01-7)
integrity
(principles of the code of professional conduct of the American Institute of Certified Public Accountants) to maintain and broaden public confidence, member should perform all professional responsibilities with the highest sense of integrity. (24) (L01-7)
income statement
(revenues - expenses = net income or loss)
statement of retained earnings
(shows how much net income has been accumulated by the business minus dividends paid)
Tax and Financial Planning
Accountants help individuals and companies with financial planning, investments, taxes, and mergers and acquisitions.
ElderCare
Accountants provide assurance services to children and family members that their elderly family members will have long-term care.
results of operations
Accountants use the term ____________ to describe an entity's financial activities during the year. (6) (L01-1)
financial position
Accountants use the term _______________ to describe an entity's financial resources and obligations at a point in time. (6) (L01-1)
audit
An _________________ is an examination of the company's financial statements, designed to determine the fairness of the statements. Accountants and auditors use the term fair in describing financial statements that are reliable and complete, conform to generally accepted accounting principles, and are not misleading. (20) (L01-5)
accounting system
An ___________________ consists of the personal, procedures, technology, and records used by an organization to develop accounting information and to communicate this information to decision-makers. (7) (L01-2)
control environment/control environment/control environment
An organizations ____________________ is the foundation for all the other elements of internal control, setting the overall tone for the organization. Factors that affect the company's control environment are: (1) the organization's commitment to integrity and ethical values, (2) the independence of the board of directors from management, and the board's oversight of internal control, (3) management assignment, with board oversight, of appropriate levels of authority and responsibility, (4) an organizational commitment to attract, develop, and retain competent individuals, and (5) individuals being held accountable for the performance of their control responsibilities. The ____________ is particularly important because fraudulent financial reporting often results from an ineffective ________________. (9) (L01-2)
non-audit
Another important provision of the Sarbanes-Oxley act is to ban auditors from providing many ___________ services for their audit clients on the assumption that those services interfere with the objectivity required of auditors and rendering opinions regarding financial statements upon which investors and creditors rely. (20) (L01-5)
Judgment/Internal control
Both financial and managerial accounting require the use of ______________, and information prepared for either purpose should be subject to the company's system of _____________. (4) (L01-1)
accounting information systems/accounting system/accounting system
Enterprises design and use their internal __________ to help them achieve their stated goals and missions. Multiple reports, some as part of the normal reporting process and some that are specially constructed in design, are produced and distributed regularly. To motivate managers to achieve organizational goals, the internal __________ is also used to evaluate and reward decision-making performance. When the ___________ compares the planner budget to the actual outcomes for a period, it creates a signal about the performance of the employee responsible for that part of the budget (16). (L01-4)
Assurance Services
In addition to traditional audit services, new professional areas have developed for accounting professionals. These include independent examinations of Internet-based systems that carry the professional equivalent of a financial statement audit. CPAs also test information systems to determine the degree of security and integrity provided by the system.
accounting systems
In large businesses, ___________________ include computers, highly trained personnel, and accounting reports that affect the daily operations of every department. (7) (L01-2)
accounting systems
In small businesses __________________ may consist of little more than a cash register, a checkbook, and an annual trip to an income tax preparer. (7) (L01-2)
International Accounting
In today's global economy, accountants with an understanding and mastery of international trade laws and regulations are in great demand.
Consulting services
Individuals, businesses, financial institutions, non-profit organizations and government agencies need objective advice and assurance from accountants.
Financial Accounting Information
Information that's provided to external parties who have an interest in a company is sometimes referred to as what? (4) (L01-1)
Managerial Accounting Information
Information used internally by management and others is commonly referred to as what? (4) (L01-1)
Information Technology Services
Opportunities for accountants with strong computer skills to design and implement advanced systems to fit an organization's needs.
American Institute of CPAs (AICPA)
The ______________ is a professional Association of certified public accountants. Its mission is to provide members with the most relevant knowledge, resources and advocacy, thereby enabling members to protect the evolving public interest. This association conducts accounting research and works closely with the FASB and the establishment and interpretation of generally accepted accounting principles. Prior to the establishment of the FASB, this association had primary responsibility for the establishment of accounting principles. This associations auditing standards Board has developed the standards by which audits of private companies are conducted and the PCAOB has accepted many of the standards for audits of public companies. (21) (L01-6)
Public Company accounting oversight board (PCAOB)/PCAOB
The ________________ is a quasi-governmental body charged with oversight of the public accounting profession. The board was created as a result of the Sarbanes-Oxley act of 2002 and began operations in the spring of 2003. this body has extensive powers and overseeing the accounting profession. Any accounting firm wishing to audit a public company must register with this body. This body sets auditing standards for audits of publicly traded companies, an activity that previously was performed by the accounting profession. The board also inspects the quality of audits performed by public accounting firms and conducts investigations and administers penalties when substandard audit work is alleged. The _________________ has five members who serve a five-year term and are eligible to be re-appointed once. No more than two members of the board can be certified public accountants. (20) (L01-5)
statement of cash flows
The ________________ is an activity statement that shows the details of the company's activities involving cash during a period of time. in other words, it depicts the ways cash has changed during a designated period. Information about cash activity of the enterprise is considered to be an important signal to investors and creditors. (13)(L01-3)
IASB/IASB/IASB/IASB (international accounting standards Board)
The ________________ issues international financial reporting standards (IRFS). European Union countries, Australia, and Canada, among over 100 other countries, require listed companies to follow ________ standards. Most important, the SEC accepts financial statements prepared using ________ standards from foreign countries that are cross listed on a US stock exchange. in addition, the American Institute of CPAs (AICPA), which essentially has jurisdiction over private company reporting, accepts either FASB standards or ________ standards as authoritative sources of accounting principles. (19) (L01-5)
Internal Revenue Service (IRS)
The _________________ handles the millions of income tax returns filed annually by individuals and business organizations and frequently performs auditing functions to verify data contained in these returns. (25)
Government accountability office (GAO)
The __________________ audits many agencies of the federal government, as well as some private organizations doing business with the government. This office reports its findings directly to Congress, which, in turn, often discloses these findings to the public. (25)
income statement
The ___________________ is an activity statement that shows details and results of the company's profit related activities for a period of time (for example, a month, quarter, or year). in other words, it depicts the profitability of an enterprise for a designated period of time (13)(L01-3)
Management Accounting
The ___________________ works for one enterprise. _________________ develop and interpret accounting information designed specifically to meet the various needs of management. The chief accounting officer of an organization usually is called the chief accounting officer or controller. The term controller has been used to emphasize the fact that one basic purpose of accounting data is to aid in controlling business operations. The CAO or controller as part of the top management team, which is responsible for running the business, setting its objectives, and seeing that those objectives are met. in addition to developing information to assist managers, management accountants are responsible for operating the company's accounting system, including the recording of transactions and the preparation of financial statements, tax returns, and other accounting reports. (25)
committee of sponsoring organizations of the Treadway commission (COSO)
The ____________________ is a voluntary private sector organization dedicated to providing thought leadership through the development of comprehensive frameworks and guidance on enterprise risk management, internal control, in fraud deterrence designed to improve organizational performance and governance and to reduce the extent of fraud in organizations. This organization was originally formed in 1985 to sponsor the national commission on fraudulent financial reporting. this organization is best known for its work in developing the standards for evaluating internal control - particularly internal control over financial reporting. (21) (L01-6)
accounting information
The ______________________ created and used by management is intended primarily for planning and control decisions. (16)(L01-4)
securities and exchange commission (SEC)
The ______________________ is a governmental agency with the legal power to establish accounting principles in financial reporting requirements for publicly owned corporations. In the past, this governmental agency has generally adopted the recommendations of the FASB, rather than develop its own set of accounting principles. Thus, accounting principles continue to be developed in the private sector but are given the force of law since this governmental agency looks to the FASB to develop accounting standards in the United States. (18) (L01-5)
information system
The ______________________ produces information regarding financial position, profitability, and cash flows. this information meets the needs of users of the information - investors, creditors, managers, and so on - and supports many kinds of financial decisions such as performance evaluation and resource allocation, among others. (8)(L01-2)
Institute of management accountants (IMA)
The mission of the ____________ is to provide a form for research, practice development, education, knowledge sharing, and the advocacy of the highest ethical and best business practices in management accounting and finance. This organizations recognized by the financial community as a respected organization that influences the concepts and ethical practice of management accounting and financial management. This organization sponsors a number of educational activities for its members, including national seminars and conferences, regional and local programs, self-study courses, and in-house and online programs. This organization also offers a certification program - the certified management accountant (CMA). This designation testifies to the individuals competence and expertise in management and accounting and financial management. (21) (L01-6)
accounting information
The types of _____________________ that a company develops very with such factors as the size of the organization, whether it is publicly owned, and the information needs of management. (8)(L01-2)
public accounting
The work of ______________________ consist primarily of auditing financial statements, income tax work, and management advisory services (management consulting). the services offered by this type of accounting extend well beyond tax planning and accounting matters. These types of accountants advise management on such diverse issues as international mergers, manufacturing processes, and the introduction of new products. They assist because financial considerations enter into almost every business decision. a great many of these types of accountants occupy managerial positions with organizations. They often move directly into such top management positions as controller, treasurer, or chief financial officer (25)
Forensic Accounting/Forensic Accounting
This is also known as investigative accounting or fraud auditing. ________________ searches for evidence of criminal misconduct.
capital
When ________________, which is a scarce resource, is allocated wisely, the overall prosperity of society is maximized. (6)(L01-1)
Environmental Accounting
With increasing resources focused on environmental issues, accountants conduct audits and design systems to ensure compliance with environmental regulations.
judgment/judgment
_____________ always involves some risk of error. Some errors in __________ result from carelessness or inexperience on the part of the preparer of financial information or the decision maker who uses that information. Others occur simply because future events aren't certain and do not work out as expected when the information was prepared. (22) (L01-7)
costs, prices, sales volume, profits, and return on investment
_____________ are all accounting measurements. (5) (L01-1)
federal securities
______________ laws require publicly owned companies to prepare financial statements in conformity with generally accepted accounting principles. The statements must be filed with the Securities and Exchange Commission, distributed to stockholders, and made available to the public. (8) (L01-2)
income tax
______________ regulations require every business to have an accounting system that can measure the company's taxable income and explain the nature and source of every item in the company's income tax return. (8) (L01-2)
integrity
_______________ in accounting requires honesty and a strong commitment to ethical conduct- doing the right thing. For a professional accountant, ethical behavior is just as important as competence. However, it is far more difficult to test or enforce. (23) (L01-7)
financial accounting information
________________ is designed primarily to assist investors and creditors in deciding where to place their scarce investment resources. Such decisions are important to society, because they determine which companies and industries will receive the financial resources necessary for growth. (6)(L01-1)
management/managerial accounting
________________ or _______________ involves the development and interpretation of accounting information intended specifically to assist management in operating the business. Management use this information in setting the company's overall goals, evaluating the performance of departments and individuals, deciding whether to introduce a new line of products, and making virtually all types of managerial decisions. (6) (L01-1)
control activities
_________________ are the policies and procedures that management puts in place to address the risks identified during the risk assessment process. Examples of control activities include approvals, authorizations, verifications, reconciliations, reviews of operating performance, physical safeguarding of assets, and segregation of duties. (9)(L01-2)
financial accounting
_________________ provides information about the financial resources, obligations, and activities of an enterprise that is intended for use primarily by external decision-makers - investors and creditors. (10) (L01-3)
external users
__________________ of accounting information are individuals in other enterprises that have a current or potential financial interest in the reporting enterprise, but that are not involved in the day-to-day operations of that enterprise. (10) (L01-3)
Financial Accounting
__________________ refers to information describing the financial resources, obligations, and activities of an economic entity (either in organization or an individual). (6) (L01-1)
risk assessment
___________________ involves identifying, analyzing, and managing those risks that pose a threat to the achievement of the organization's objectives. For example, a company should assess the risk that might prevent it from preparing reliable financial reports and then take steps to minimize those risks. (9) (L01-2)
statement of financial position (balance sheet)
___________________ is a position statement that shows where the company stands in financial terms at a specific date.in other words, it's a snapshot of the business and financial or dollar terms (13)(L01-3)
accounting information
_____________________ is the means by which we measure and communicate economic events. (5) (L01-1)
accounting principles
_____________________ originate from a combination of tradition, experience, and official decree. Require authoritative support in some means of enforcement. Our sometimes arbitrary. May change over time as shortcomings in the existing rules come to light. Must be clearly understood and observed by all participants in the process. (18) (L01-5)
professional accountants
_______________________ are involved more with the interpretation and use of accounting information then with its actual preparation. Their work includes evaluating the efficiency of operations, resolving complex financial reporting issues, forecasting the results of future operations, auditing, tax planning, and designing efficient accounting systems. (26)
information and communication
____________________________ involves developing information systems to capture and communicate operational, financial, and compliance related information necessary to run the business. Effective information systems capture both internal and external information. In addition, an effective control system is designed to facilitate the flow of information downstream ( for management to employees), upstream (from employees to management), and across the organization. (9) (L01-2)
external financial reporting
_____________________________ is primarily used by two groups - investors and creditors. for these reasons, we sometimes refer to investors and creditors as the primary external financial information users (10)(L01-3)
daily business operations
a company's managers and employees constantly need information to run and control _______________. they need to know the amount of money in the company's bank accounts; the types, quantities, and dollar amounts of merchandise in the company's warehouse; and the amounts owed to specific creditors. (6) (L01-1)
Sarbanes-Oxley act
a landmark piece of securities law, designed to improve the effectiveness of corporate financial reporting through enhanced accountability of auditors, audit committees, and management.. one of the act's requirements is that public companies issue a yearly report indicating whether they have an effective system of internal control over financial reporting. (10) (L01-2)
certified internal auditor (CIA)
a professional designation issued by the Institute of internal auditors signifying expertise in internal auditing. the requirements for becoming this type of accountant are similar to those for becoming a CPA (23) (L01-7)
certified management accountant(CMA)
a professional designation issued by the Institute of management accountants signifying expertise in management accounting. the requirements for becoming this type of accountant are similar to those for becoming a CPA (23) (L01-7)
Resource Usage
accounting information measures the efficiency and effectiveness of __________________. by comparing the enterprises resource inputs and outputs with measures of competitors effectiveness and efficiency, and assessment can be made of how effective management is in achieving the organization's mission. The accounting system uses money as a common unit to achieve these types of comparisons. (17) (L01-4)
cost-effective
accounting systems must be _____________- that is, the value of the information produced should exceed the cost of producing it. (8) (L01-2)
monitoring activities
all internal control systems need to be monitored. __________________ enabled the company to evaluate the effectiveness of its system of internal control over time. Monitoring activities are generally accomplished through ongoing management and supervisory activities, as well as by periodic separate evaluations of the internal control system. (9) (L01-2)
accounting information
although some ___________, like financial accounting information, is historical in nature, the purpose in creating and generating it is to affect the future. (17)(L01-4)
Certified Public Accountant (CPA)
an accountant who is licensed by state after meeting rigorous education, experience, and examination requirements. these types of accounts are licensed by the states, in much the same manner as states licensed physicians and attorneys. The licensing requirements vary somewhat from state to state, but in general, an individual must be of good character, have completed 150 semester hours of college work with a major in accounting, pass a rigorous examination, and have accounting experience. In addition, most states require that these types of account and spend at least 40 hours per year and continuing professional education throughout their careers. (22) (L01-7)
assets/liabilities/equity
and Enterprises resources are often referred to as ______________, in the primary claims to those resources are the claims of creditors and owners, known as _____________ and owners' ______________. (12) (L01-3)
management accounting information
as with financial accounting information, ______________________ is a means to an end, not an end in and of itself. The ultimate objective is to design and use an accounting system that helps management achieve the goals and objectives of the enterprise. (17) (L01-4)
language of business
because accounting is widely used to describe all types of business activity, it is sometimes referred to as the ______________. (5) (L01-1)
public accounting, management accounting, governmental accounting, and accounting education
career opportunities in accounting may be divided into what four broad areas: (25)
internal users
examples of______________ of accounting information systems are as follows: Board of Directors, chief executive officers, chief financial officers, vice presidents, business unit managers, plant managers, store managers, and line supervisors. (14) (L01-4)
judgment
financial accounting concepts are critical in order to understand the financial condition of a business enterprise. Determining the company's net income by subtracting its expenses from its revenue is a particularly important part of financial reporting today. This may appear to be a simple process of keeping accounting records and preparing reports from those records, but a great deal of ________________ is required. For example, when should the cost of acquiring a resource that is used for several years be recognized as an expense in the company's financial statements? What information is particularly useful for management, but not appropriate for public distribution because of the potential competitive disadvantage that might result? (4) (L01-1)
general-purpose
financial accounting information is also used by managers and income tax returns. In fact, financial accounting information is used for so many different purposes that it is often called _______________ accounting information. (6)(L01-1)
interim financial statements
financial statements prepared for periods of time shorter than one year ( for example, for three months or one month) are referred to as ___________________. (13) (L01-3)
accounting system
in developing information about the activities of the business, every ______________ system performs the following basic functions: interpret and record the effects of business transactions. Classify the effects of similar transactions in a manner that permits determination of the various totals and subtotals useful to management and used in accounting reports. Summarize and communicate the information contained in the system to decision-makers. (8) (L01-2)
internal control/internal control/internal control
in developing its accounting system, and organization also needs to be concerned with developing a sound system of __________________. _______________ is a process designed to provide reasonable assurance that the organization produces reliable financial reports, complies with applicable laws and regulations, and conducts its operations in an efficient and effective manner. the company's Board of Directors, its management, and other personnel are charged with developing and monitoring ____________(9) (L01-2)
timely
in order to plan for and control ongoing business processes, accounting information needs to be ____________. The competitive environment faced by many enterprises demands immediate access to information. (17) (L01-4)
the securities and exchange commission (SEC), the financial accounting standards Board (FASB), and the international accounting standards Board (IASB)
in the United States, these three organizations are particularly important in establishing accounting principles? (18) (L01-5)
corporate governance
includes the corporate structures and processes for overseeing a company's affairs, for example, the Board of Directors and the company's internal control processes. (27)
general-purpose information
information that is intended to meet the needs of multiple users that have an interest in the financial activities of an enterprise rather than tailored to the specific information needs of one user. (14) (L01-3)
decision-making authority
information that is produced monitoring control processes needs to be provided to those who have __________________ to correct problems. (17)(L01-4)
cash flow prospects
information that is useful to you in making judgments about the company's ability to provide you with what you expect in terms of the return of your funds as well as a return on your funds while you do not have use of them is what we mean by information about ______________. (11) (L01-3)
external decision-makers
long-range plans, research and development results, capital budget details, and competitive strategies typically are closely guarded corporate secrets and are not available to _______________. (14) (L01-4)
database warehousing approach
many enterprises use a __________________ for the creation of accounting information systems. This approach, coupled with user-friendly software, allows management and other designated employees access to information to create a variety of accounting reports, including required external financial reports. (15) (L01-4)
accounting system
many factors affect the structure of the ________________ within a particular organization. among the most important are the company's needs for accounting information and the resources available for operation of the system. (7) (L01-2)
codes of ethics and professional conduct
many professional organizations have __________ that direct the activities of their members. The AICPA, for example, has a code of professional conduct that expresses the accounting profession's recognition of its responsibilities to the public, to clients, and colleagues. (23) (L01-7)
American Accounting Association (AAA)
membership in the ________________ is made up primarily of accounting educators, although many practicing accountants are members as well. The mission of this association is to further the discipline and profession of accounting through education, research, and service. The focus of many of this association's activities is on improving accounting education by better preparing accounting professors and on advancing knowledge in the accounting discipline through research and publication. (21) (L01-6)
financial statements/financial statement/financial statement
one of the primary ways investors and creditors assess whether an enterprise will be able to make future cash payments is to examine and analyze the enterprises _______________________. in the general sense of the word, a statement is simply a declaration of something believed to be true. A _____________, therefore, is simply a monetary declaration of what is believed to be true about an enterprise. When accountants prepare _________________, they are describing in financial terms certain attributes of the enterprise that they believe fairly represent its financial activities. (13) (L01-3)
generally accepted accounting principles (GAAP)
principles that provide the framework for determining what information is to be included in financial statements and how the information is to be prepared and presented. (18) (L01-5)
financial reporting
providing information for you to assess your friend's ability to meet his cash flow commitment to you is essentially what _____________ is about. You need information to assess the risk you are taking and the prospects that your friend will be able to deliver $108,000 to you one year from the time you loan him $100,000. (11) (L01-3)
bookkeeping/bookkeeping/bookkeeping
some people think that the work of professional accountants consist primarily of __________________. actually, it doesn't. In fact, many professional accountants do little or no _________________. ________________ is the clerical side of accounting - the recording of routine transactions and day-to-day record-keeping. Today such task to perform primarily by computers and skilled clerical personnel, not by accountants. (26)
Accounting Systems
the basic purpose of the __________________ is to meet the organization's needs for information as efficiently as possible. (7)(L01-2)
internal control
the five components of ______________ are the control environment, risk assessment, control activities, information and communication, and monitoring activities. (9) (L01-2)
public's best interest
the greatest unique responsibility of professionals is to serve the ______________, even at the sacrifice of personal advantage. This responsibility stems from the fact that the public has little technical knowledge and the professions, yet fair and competent performance by professionals is vital to the public's health, safety, or well-being. Accounting affects the public's well-being in many ways, because accounting information is used in the allocation of economic resources throughout society. Thus, accounts have a basic social contract to avoid being associated with misleading information. (25)
cash flow prospects
the likelihood that an enterprise will be able to provide an investor with both a return on the investors investment and the return of that investment. (11) (L01-3)
return on investment
the payment of an amount (interest, dividends) for using another's money. (11) (L01-3)
financial statements
the primary ________________ are the following: 1) statement of financial position ir balance sheet. 2) income statement. 3) statement of cash flows. (13)(L01-3)
good decisions
the primary objective of accounting is to provide information that is useful in making ______________. and as a result of good decisions societal prosperity and welfare is maximized. (4) (L01-1)
integrity
the qualities of being complete, unbroken, unimpaired, sound, honest, and sincere. this enables investors and creditors to rely on financial accounting information without fear that the management of the reporting enterprise has altered the information to make the company's performance look better than it actually was (18) (L01-5)
return of investment
the repayment to an investor of the amount originally invested in another enterprise. (11) (L01-3)
competence/professional judgment/ethical behavior
to illustrate the importance of ______________, ________________, and ______________ in the preparation of financial statements, consider the following complex issues that must be addressed by the account: at what point should an enterprise account for transactions that continue over a long period of time, such as a long-term contract to construct an interstate highway? What constitutes adequate disclosure of information that would be expected by a reasonably informed user of financial statements? At what point are a company's financial problems sufficient to question whether it will be able to remain in business for the foreseeable future, and which should that information be communicated to users of its financial statements? When have efforts by management to improve ( that is, window dress) its financial statements crossed the line that is inappropriate, making the financial statements actually misleading to investors and creditors? (22) (L01-7)
financial accounting standards Board(FASB)/FASB
today, the most authoritative source of generally accepted accounting principles is the _________________. The ____________ is an independent rulemaking body, consisting of seven members from the accounting profession, industry, financial statement users, and accounting education. Lending support to these members are an advisory Council and a large research staff. This rulemaking body has compiled all of its standards, and those of its predecessors, and accounting standards codification. It periodically issues updates to its codification. The codification represents official expressions of generally accepted accounting principles. This independent rulemaking body is part of the private sector of the economy - it is not a governmental agency. The development of accounting principles in the United States traditionally has been carried out in the private sector, although the government, acting through the SEC, exercises considerable influence. (19) (L01-5)
accounting information
users of _______________ - both external and internal - recognize that the reliability of the information is affected by the competence, professional judgment, and ethical standards of accountants. (24) (L01-7)
financial reporting
what are the objectives of __________________? 1) provide general information useful in making investment and credit decisions. 2) provide information useful in assessing the amount, timing, and uncertainty of future cash flows. 3) provide specific information about economic resources, claims to resources, and changes in resources and claims. (12) (L01-3)
international accounting standards Board(IASB)/IASB
when an enterprise operates beyond the borders of its own country, differences in financial reporting practices between countries can pose significant problems. As a result of increasing cross-border activities, efforts are underway to harmonize accounting standards around the world.. The ______________________ is playing a leading role in the harmonization process. The London-based ___________ is an elite panel of professionals with deep knowledge of accounting methods used in the most vibrant capital markets. (19) (L01-5)
Institute of internal auditors (IIA)
with more than 180,000 members in over hundred and 70 countries, the ________________ is the primary international professional association dedicated to the promotion and development of the practice of internal auditing. it provides professional development through the certified internal auditor program in leading-edge conferences and seminars. (21) (L01-6)