Chapter05 - CHAPTER 5 Communicating and Interpreting...

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1 CHAPTER 5 Communicating and Interpreting Accounting Information ACCT 2301 Professor Zining Li
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2 Responsibility for accounting information Company management CEO and CFO Independent auditor Unqualified audit opinion (clean opinion) Board of directors Audit committee
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3 Users of accounting information Private investors Financial analysts Creditors (lenders) Institutional investors Pension funds, mutual funds, endowment funds, etc.
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4 Guiding Principles Relevant: useful to assess past activity and predict future performance Reliable: accurate, unbiased, and verifiable Consistent and comparable: similar accounting methods are applied over time and across firms Material: Amounts that are large enough to influence decisions Conservative: Care should be taken NOT to overstate assets (revenues) or understate liabilities (expenses)
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5 Disclosure of accounting information Press release Earnings announcement Conference call Annual report Quarterly reports SEC reports Forms 10-K & 10-Q Form 8-K (current events)
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6 Annual Report ( 10-K)
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This note was uploaded on 02/10/2012 for the course ACCT 2301 taught by Professor Li during the Fall '09 term at University of Central Florida.

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Chapter05 - CHAPTER 5 Communicating and Interpreting...

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