UNIT 2B _FINANCIAL ENVIRONMENT

UNIT 2B _FINANCIAL ENVIRONMENT - ACCT ACCT 4115 UNIT 2B:...

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ACCT 4115 UNIT 2B: FINANCIAL ENVIRONMENT Notes and Narration by Jo Lynne Koehn, University of Central Missouri ACCT 4115 UNIT 2B: FINANCIAL ENVIRONMENT Notes and Narration by Jo Lynne Koehn, University of Central Missouri
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Capital Markets Capital Markets Equity Debt Primary Initial public offering Bank loan, initial debt security offering Secondary Buying & selling of stocks on securities markets Buying & selling on secondary debt market
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Credit Decisions Credit Decisions Commercial banks provide short- term commercial loans The major concern: will the company Loan terms: interest rate, collateral, debt covenants
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Equity Investment Decisions Equity Investment Decisions Public securities trade on formal market exchanges (these are secondary markets) Buying & selling are now relatively cheap transactions Mutual funds are a useful alternatives to individual securities Stock investing has high short-term risks
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Accounting Regulators Accounting Regulators Securities & Exchange Commission (SEC)– regulates securities markets and financial reporting (10-K, 10-Q, 8-K) Financial Accounting Standards Board (FASB)– promulgates GAAP International Accounting Standards Board (IASB) Note: European Harmonization
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SEC Regulation SEC Regulation Mission: Protect investors & maintain integrity of the securities markets Established following the Great Market Crash (SEC Act of 1934) SEC requires public registration, proxy statements & annual (10-K) and quarterly (10-Q) reports, 8-K for specific events Update: Sarbanes-Oxley Act of 2002 & Public Company Accounting Oversight Board
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Environmental Factors Environmental Factors Securities and Exchange Commission (SEC) Independent, quasi-judicial government agency Can modify & set GAAP, if necessary Rarely directly challenges FASB Major player in global accounting
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Form 10-K (Annual Report) 10-Q (Quarterly Report) Other SEC Filings 14-A (Proxy Statement/ Prospectus) Statutory Financial Reports 8-K (Current Report) 20-F (Registration Statement/ Annual Report [Foreign])
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The FASB The FASB Seven member board, full time, appointed
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This note was uploaded on 02/09/2012 for the course ACCT 4115 taught by Professor Jin during the Summer '11 term at UCM.

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UNIT 2B _FINANCIAL ENVIRONMENT - ACCT ACCT 4115 UNIT 2B:...

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