Of course a set of criteria is needed to govern the

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Unformatted text preview: ract, providing assurance to the owner that he or she will not misuse resources. For example, the two parties may agree that the manager will periodically report on how well he or she has managed the owner’s assets. Of course, a set of criteria is needed to govern the form and content of the manager’s reports. In other words, reporting of this financial information to the owner must follow some set of agreedupon accounting principles. As you can see, one primary role of accounting information is to hold the manager accountable to the owner—hence the word “accounting.” 4 Also see M. Chatfield, A History of Accounting Thought (Hinsdale, IL: Dryden Press, 1974), for a discussion of the historical development of accounting and auditing. See D. L. Flesher, G. J. Previts, and W. D. Samson, “Auditing in the United States: A Historical Perspective,” ABACUS (2005), pp. 21–39, for a discussion of the development of auditing in the United States. mes25435_ch01_001-032.indd mes25435_ch01_001-032.indd 6 26/05/11 9:...
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This note was uploaded on 12/08/2012 for the course ACCT 564 at Washington University in St. Louis.

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