Ch01 - CHAPTER 1 AN OVERVIEW OF FINANCIAL ACCOUNTING AND...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 1 AN OVERVIEW OF FINANCIAL ACCOUNTING AND AUDITING FULFILLMENT OF LEARNING OBJECTIVES Learning Objective Review Question Discussion Question Exercise Problem 1. Define accounting, financial accounting, and the conceptual framework of financial accounting. 1,2 2. State the objective of financial accounting and reporting. 3-5 1,2 3. Explain the qualitative characteristics of information. 6-8 2 4. Define the elements of financial accounting. 9-15 3 1-7 5. Define transaction and transactions processing. 16-18 5 6. Discuss the nature of auditing and distinguish between external auditing and internal auditing. 19 7. Identify management’s assertions in the financial report and explain the importance of verifying these assertions. 20 4 8. Define internal control and indicate its components. 21,22 6 9. Discuss the contents of 23,24
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Ketz—Overview of Financial Accounting and Auditing Page 1-2 management’s responsibility report and an unqualified audit report. 10. Explain the most important ethical principle in financial accounting. . 25 7 ATTRIBUTES OF EXERCISES AND PROBLEMS Exercise/ Problem Description Difficulty Level Estimate Time (minutes) EXERCISES 1 Accounting identity Simple 5-10 2 Computation of net income Simple 5-10 3 Retained earnings equation Simple 5-10 4 Calculation of cash flow Simple 5-10 5 Balance sheet or income statement accounts Medium 10-20 6 Balance sheet and income statement of a bank Medium 15-25 7 Balance sheet and income statement of an insurance corporation Medium 15-25
Background image of page 2
Ketz—Overview of Financial Accounting and Auditing Page 1-3 ANSWERS TO REVIEW QUESTIONS 1. Accounting is the process of capturing, measuring, and communicating economic information about a firm to interested parties. There are five branches of accounting: financial accounting, management accounting, tax accounting, accounting information systems, and auditing. Financial accounting focuses on issues of providing information about the results of a company's activities to investors and creditors. Management accounting concentrates on the generation and communication of information to the managers of the enterprise. Tax accounting emphasizes the information that a firm reports to tax authorities such as the Internal Revenue Service. Accounting information systems centers on issues of how to gather and process data that are employed for financial, managerial, and tax purposes. Auditing is concerned with the verification of accounting statements. 2. The conceptual framework is the set of six documents written by the Financial Accounting Standards Board. These documents are referred to as Statements of Financial Accounting Concepts, and they embrace such foundational issues as the objective of financial accounting, the qualitative characteristics of information, and the elements of financial accounting. 3. The primary users of financial reports are investors and creditors.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/26/2011 for the course HRIM 318 taught by Professor Howard,paul during the Fall '10 term at Penn State.

Page1 / 16

Ch01 - CHAPTER 1 AN OVERVIEW OF FINANCIAL ACCOUNTING AND...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online