20 - Ch1 The Language of Business • Accounting is an...

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Unformatted text preview: Ch1 The Language of Business • Accounting is an information system Measures business activities Processes data into reports Communicates results to people and organizations • Accounting is used to make decisions Financial and Management Accounting FINANCIAL • Provides information for external users: Investors Bankers Government agencies MANAGEMENT • Provides information for internal users: Managers of the company Ethics in Accounting • U.S. companies are required to report relevant and reliable information • Recent corporate scandals have emphasized the need for ethical reporting in accounting • Companies that sell stock to the public must have an audit by independent accountants Examination of financial records to ensure reliability ...
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