Management and Organizational Studies 1023A/B Chapter Notes - Chapter 2: Barter, Financial Engineering, Share Capital

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Christina Maco

Document Summary

Prescribe nature, function, and limits of financial accounting and financial statements. Standard setting-an established body of concepts and objectives. Solve new and emerging practical problems (more quickly) With good judgement & universally accepted conceptual framework. 3rd level: foundational principles (establish & apply accounting standards) Stock markets not always evenly accessible /available for investors & creditors. Stakeholders use expertise to act in their own self-interest. Provide information financial position, its changes & performance. Efficient & effective management + responsibilities to use entity"s resources. ?useful information: benefits exceed costs ( to different kinds of users) Distinguish better & inferior (more/ less useful) information. Determine which alternative gives the most useful information for decision-making purpose. Final outcome of past, present & future events. Hard to give firm guidelines to decide-depends on relevant amount & relevant importance. Any sensitive number on the financial statements (financial statement ratios & management compensation) Inadequate / inappropriate description of an accounting policy.