- Managerialvs.Financialaccounting GAAP o What,why,how o Auditingprocess Auditorsstatement o Whatdoesitsay,NOTsay o (consistently o Nothingabouta

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Key points from last class Managerial vs. Financial accounting GAAP o What, why, how o Auditing process Auditor’s statement o What does it say, NOT say o It is a sampling of the information from the statements that are  checked against GAAP to see if it is used (consistently). o Nothing about accuracy (only says if there are MATERIAL errors or  not, nothing about minor errors) o Use a sampling technique to check if GAAP is followed Balance sheet vs. income statement o Cash vs. Profit o There is the possibility that the company goes bankrupt because there  is no cash on hand (even with a profit) Accounting Equation Current Assets o Order of liquidity – time frame to convert assets into cash Cash, marketable securities, notes/accounts payable, inventory,  supplies, prepaid expense Know what prepaid expense is o The order reveals If the company can pay its debts How much the company has in terms of liquid assets The relative time it may take to pay back its debts
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This note was uploaded on 01/11/2012 for the course BIOL 2021 BIOL 2021 taught by Professor Pat during the Fall '10 term at York University.

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- Managerialvs.Financialaccounting GAAP o What,why,how o Auditingprocess Auditorsstatement o Whatdoesitsay,NOTsay o (consistently o Nothingabouta

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