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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
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This note was uploaded on 12/08/2012 for the course ACCT 564 at Washington University in St. Louis.