HilarioWritingAssignment_AnnualReport

HilarioWritingAssignment_AnnualReport - Understanding...

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Understanding Corporate Annual Reports Financial Accounting 1A – Online By: Student Name Dr. Seyedin References: www.ibm.com/financial guide www.aicpa.org/info/Sarbanes-Oxley2002.asp www.sec.gov A. What is an annual report? An annual report is a formal report on a company’s performance in the preceding year. A public company is required by the Securities Exchange Commission to keep stockholders up to date on the company’s state. The annual report provided stockholders and those interested in the company with the company’s financial condition from the previous year as well as the company’s goals, business mission and management philosophy. B. Name the federal government agency that requires a publicly held corporation to keep shareholders informed of its state of business. Securities Exchange Commission (SEC) C. What is the purpose of auditing financial statements? The purpose of auditing financial statement is to check how reliable for the implied assertions made by the organization’s financial statements which represents the organization’s financial position and performance, thus allowing stakeholders or interested parties accurate information for making downstream decisions. Ultimately, an audit of financial statements aims to reduce the possibility of material misstatements, such as false or missing information due to fraud or error. D. What is the name of rules and regulations used to prepare financial statements? Generally accepted accounting principles (GAAP) and this are developed and enforced by the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) E. Name two other primary financial information sources. The Financial Accounting Standards Board and the Securities and Exchange Commission F. What type of information is provided in the statement of earnings? Revenues and expenses. G. What type of information is provided in the statement of financial position? Assets, liabilities and stockholders’ equity.
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H. What type of information is provided in the statement of cash flows? The flow of cash in and out of a company in a given year including the company’s sources and uses of cash, the beginning and ending values for cash and cash equivalents each year and the combined total change in cash and cash equivalents from all sources and uses of cash. I. Briefly explain the purpose of Public Company Accounting Oversight Board (PCAOB). To enforce the provisions of the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board (PCAOB) was created to oversee the auditors of public companies, by providing support for the preparation of informative, fair and independent audit reports for the protection of investors. J. Under the new rules of the Sarbanes-Oxley Act of 2002, to whom
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This note was uploaded on 06/22/2009 for the course ACCOUNTING 1A taught by Professor Seyedin during the Fall '08 term at Foothill College.

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HilarioWritingAssignment_AnnualReport - Understanding...

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