First%20Five%20Sets%20of%20Notes%20Accounting%20Spring%2020100

First%20Five%20Sets%20of%20Notes%20Accounting%20Spring%2020100

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Overview of Financial Accounting Dr. Mimi Alciatore
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Financial Accounting Information: Demand for financial accounting information Extends to numerous users that include: Managers and employees Shareholders and directors Customers and strategic partners Regulators and tax agencies Voters and their representatives
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Supply of Accounting Information (SEC) Filing Requirements: Form 10-K: Annual Form 10-Q: Quarterly
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Supply of Accounting Information Benefits of Disclosure Better Recruiting in Labor Markets Economic benefits from reliable disclosures
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Supply of Accounting Information Costs of Disclosure Preparation and Dissemination, Disclosures Can Cause Competitive Disadvantages for the Firm, Litigation Potential, and Political Costs
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Financial Statements
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The Accounting Equation
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Berkshire Hathaway’s Balance Sheet
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Walgreen’s
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Investing Activities
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Financing Activities
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Income Statement An Income Statement reports on operating activities. It lists amounts for Sales (Revenues) Less all Expenses (and costs ) over a period of time. Sales less Expenses yield the “Bottom-Line” Net Income Amount.
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Berkshire Hathaway’s Income Statement
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Walgreen’s
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Statement of Equity The Statement of Equity reports on changes in the accounts that makeup equity Contributed Capital Earned Capital (retained earnings and accumulated other comprehensive income) Other (typically accumulated other comprehensive income and minority or noncontrolling interest).
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Berkshire Hathaway’s Statement of Stockholders’ Equity
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Statement of Cash Flows The Statement of Cash Flows reports on cash flows for Operating, Investing, and Financing activities over a period of time.
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Profitability Analysis
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Oversight of Financial Accounting SEC oversees all Publicly Traded Companies Financial Accounting Standards Board (FASB) Public Company Accounting Oversight Board (PCAOB)
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Oversight of Financial Accounting
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Dr. Mimi Alciatore 21 The Public Company Accounting Oversight Board (PCAOB) PCAOB ( “Peekaboo” ) is a private-sector, non-profit corporation created by the Sarbanes-Oxley Act to Oversee Auditors of Public Companies .
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Dr. Mimi Alciatore 22 The Public Company Accounting Oversight Board (PCAOB) Its stated purpose is to 'protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports'. Wikipedia
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Audit Report Financial statements are Management’s Responsibility . Auditor responsibility is to express an Opinion on those statements. Auditing involves a
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This note was uploaded on 02/17/2010 for the course MIS 042 taught by Professor Herrin during the Spring '10 term at University of Texas.