Module 331-1 PPT - Accounting Processes and Controls Module...

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Accounting Processes and Controls Module 1: The Accounting Information System
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Overview - Module 1, Part A: The Financial Accounting Environment Chapter 1 (Kieso, Weygandt, and Warfield) describes the environment that has influenced both the development and use of the financial accounting process. The chapter traces the development of financial accounting standards, focusing on the groups that have had or currently have the responsibility for developing such standards. Certain groups other than those with direct responsibility for developing financial accounting standards have significantly influenced the standard-setting process. These various pressure groups are also discussed in Chapter 1.
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Learning Objectives - Module 1, Part A: The Financial Accounting Environment Learning Objectives After studying this chapter, you should be able to: Identify the major financial statements and other means of financial reporting. Explain how accounting assists in the efficient use of scarce resources. Describe some of the challenges facing accounting. Identify the objectives of financial reporting. Explain the need for accounting standards. Identify the major policy-setting bodies and their role in the standard-setting process. Explain the meaning of generally accepted accounting principles (GAAP) and the role of the codification for GAAP. Describe the impact of user groups on the rule-making process. Understand issues related to ethics and financial accounting.
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What is accounting? http://en.wikipedia.org/wiki/Accountancy Pacioli “The Father of Accounting”
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What is the environment in which accounting operates? Accounting is important for markets, free enterprise, and competition because it assists in providing information that leads to capital allocation. The better the information, the more effective the process of capital allocation and then the healthier the economy.
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What are the challenges facing financial accounting? The challenges facing financial accounting are the following: Nonfinancial measurements Forward-looking information Soft assets Timeliness
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What is the objective of accounting? The objective of general-purpose financial reporting identified in SFAC No. 8, Chapter 1, is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity. Those decisions involve buying, selling, or holding equity and debt instruments and providing or settling loans and other forms of credit. Information that is decision-useful to capital providers may also be useful to other users of financial reporting , who are not capital providers.
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… for comparability among the
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Module 331-1 PPT - Accounting Processes and Controls Module...

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