Chapter 5 - Chapter 5: Communicating and Interpreting...

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Chapter 5: Communicating and Interpreting Accounting Information PLAYERS IN THE ACCOUNTING COMMUNICATION PROCESS Regulators (SEC, FASB, PCAOB, Stock Exchanges) U.S. Securities and Exchange Commission ( SEC) : protects investors and maintain integrity of securities markets SEC oversees… FASB (who sets generally accepted accounting principles) PCAOB (who sets auditing standards for independent auditors of pubic companies) Stock exchanges (who sets overall corporate governance standards) Managers (CEO, CFO, and Accounting Staff) Chairman and chief executive officer ( CEO) : highest officer in company Chief financial officer ( CFO) : highest officer associated with financial and accounting side of company Responsible for integrity of financial information Accounting staff : actually prepare details of reports; smaller responsibility for accuracy of information Board of Directors (Audit Committee) Board of directors : elected by shareholders; responsible for maintaining integrity of company’s financial reports Has an audit committee (must be nonmanagement) responsible for hiring independent auditors Auditors Independent registered public accounting firm Follow standards by PCAOB Unqualified (clean) audit opinion : auditor’s statement that financial statements are fair presentations in all material respects in conformity with GAAP
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This note was uploaded on 04/07/2008 for the course ACC 311 taught by Professor Charrier during the Fall '08 term at University of Texas at Austin.

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Chapter 5 - Chapter 5: Communicating and Interpreting...

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