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Unformatted text preview: Chapter 2 Introduction to Financial Statements and Other Financial Reporting Topics TO THE NET 1. Carol and Lawrence Zicklin Center for Business Ethics Research. Mission Statement Our mission is to sponsor and disseminate lading edge research on critical topics of business ethics. Each student will select an academic journal and an article from that journal. 2. From Financial Accounting Standards Board Site The International Accounting Standards Board (In Part) The International Accounting Standards Board (IASB) was established in January 2001 to replace its predecessor international standard setter, the International Accounting Standards Committee (IASC). Creation of the IASB arose from the recommendations of the IASCs Strategy Working Party, which was created in 1997 and charged with reviewing the AISCs structure and process and proposing changes to better prepare that organization for the future of international accounting standard setting. More information on the IASB . The new structure has characteristics similar to that of the FASBs structure. There is an IASB Board of Trustees, an independent mostly full-time standard setting Board called the IASB, and an Advisory Council. The IASB held its first meeting to discuss technical issues in April 2001. Like the FASB, IASB meetings to discuss technical issues are open to the public. QUESTIONS 2- 1. a. Unqualified opinion with explanatory paragraph b. Unqualified opinion with explanatory paragraph c. Unqualified opinion d. Adverse opinion e. Qualified opinion 2- 2. The responsibility for the preparation and integrity of financial statements rests with management. The auditor simply examines them for fairness, conformity with GAAP, and consistency. 2- 3. The basic purpose of the integrated disclosure system is to achieve uniformity between annual reports and SEC filings. It is hoped that this will improve the quality of disclosure and lighten the disclosure load for the companies reporting. 2- 4. The explanatory paragraphs explain important considera- tions that the reviewer of the financial statements should be aware of. An example would be a doubt as to going concern ability. 2- 5. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an examination in accordance with generally accepted auditing standards. 2- 6. No. The accountant's report will indicate that they are not aware of any material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles, and the report will indicate departures from generally accepted accounting principles....
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- Spring '11