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Chapter 1 Corporate Reporting

Chapter 1 Corporate Reporting - C hapter 1 Corporate...

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Chapter 1 Corporate Reporting 1. Financial Accounting 2. Key Financial Statements Accounting: is the process of identifying, measuring, recording, classifying, summarizing, interpreting and communicating the information on business activities. Users of accounting information Internal: Management: make business decisions, expanding operations, production planning, and performance evaluation. = managerial accounting External: Investors: to make investment decisions, assess effectiveness of firms management Creditors: (banks, credit unions etc.) to assess firm’s credit risk, make lending decisions. Auditors: verify whether it conforms to financial accounting and reporting regulations (Canada and US: GAAP, Europe: IFRS which Canada will adopt in 2011) Tax authorities: CRA, to assess the amount of tax to be paid Financial analysts: make investment recommendations What is good accounting information? 1. Relevance: Predicted value: useful to predict future results Feedback value: useful to predict outcomes of previous decisions Timeliness:
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