Week 1&2 -Accounting - Planning Critical Success Factors...

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Critical Success Factors Stakeholders Top Management Vision Strategy Mission Middle Management First-Line Management Planning Organizing Directing Controlling EXTERNAL INTERNAL Economic Social Technological Political Marketing Finance Human Resources Operations
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Critical Success Factors (Indicators of Business Success) Achieving financial performance Meeting customer needs Building quality products and services Encouraging innovation and creativity Gaining employee commitment
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Accounting Comprehensive information system for collecting, recording, analyzing, summarizing, and reporting, in monetary terms, financial information Distinct from bookkeeping – recording only
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Numerous Users Managers – set goals, make decisions Employees & unions – get paid and plan for benefits Investors & creditors – estimate returns, determine growth prospects Tax authorities – accurately determine tax liabilities Government regulatory agencies – fulfill duties, i.e. protect investors
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Managerial CMA Internal users specific info. current & projected in whatever form suits No rules speed important info must be relevant, flexible, useful Org’n presented in segments Financial CA External users general info. historical information G.A.A.P. - C.I.C.A. G.A.A.P. precision important info. must be complete as per GAAP, objective, verifiable Org’n presented as whole Two Main Fields of Accounting
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G.A.A.P. G enerally A ccepted A ccounting P rinciples Cover range of issues such as revenue recognition and full disclosure Ensure comparability, reliability, interpretation Audit public companies by law Independent third party Check to ensure GAAP followed on a consistent basis over time & used proper procedures to prepare reports Auditor’s Statement. .. do NOT say statements are accurate - only fair, and no material errors
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Concepts Cost principle - assets shown at cost of construction or acquisition (historical cost) Matching Principle - expenses matched with revenues Objectivity - evidence to support value recorded Conservatism - always use lower of cost or market value
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Two Financial Statements Balance Sheet Statement of Financial Position snapshot of a point in time “stock or status of firm’s resources and claims against those resources at certain pt. in time” XYZ Company Ltd Balance Sheet as of December 31, X Income Statement Profit and Loss Statement, Statement of Earnings movie over a period of time “flow of revenues and the costs associated with generating those revenues for a period of time” XYZ Company Ltd.
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This note was uploaded on 04/08/2010 for the course BU Bu121 taught by Professor Sofy during the Spring '10 term at Wilfred Laurier University .

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Week 1&2 -Accounting - Planning Critical Success Factors...

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