ACC151Chapt1 - Chapter 1 Introducing Financial Accounting...

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Chapter 1: Introducing Financial Accounting IMPORTANTANCE OF ACCOUNTING Accounting: is a system that identifies, records, and communicates, information that is relevant, reliable, and comparable to help users make better decisions ACCOUNTING ACTIVITIES Identifying Business Activities Recording Business Activities Communicating Business Activities USERS OF ACCOUNTING INFORMATION External Users : financial accounting provides external users with financial statements ouside company (Ex:bank, stockholder, government agency, lenders, shareholders, consumer groups, external auditors, customers) Internal Users : managerial accounting provides information needs for internal decision makers (Ex: how much are they buying, should I sell them more) CEO, CFO, managers, officers, internal auditors, sales staff, budget officers, controllers anybody inside the company OPPORTUNITIES IN ACCOUNTING Accountants and auditors = 2008: 1.3 Billion Jobs; expecting 22% growth over the next 8 years ACCOUNTING JOBS BY AREA 60% Private Accounting 24% Public Accounting 16% Not-for-profit and education ETHICS – A KEY CONCEPT More important to an accountant than any other person in business or outside of business Independent Beliefs that distinguish right from wrong Accepted standards of good and bad behavior GUIDELINES FOR ETHICAL DECISIONS 1) Identify ethical concerns 2) Analyze options 3) Make ethical decision GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) Standard that we have to do our reporting buy tells us when, how, and how much did we record; financial accounting practice is governed by concepts and rules known as GAAP Relevant information = Affects the decision of its users Reliable Information = Trusted by users Comparable Information = Used in comparisons across years and companies
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ACC151Chapt1 - Chapter 1 Introducing Financial Accounting...

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