Class Notes (922,171)
CA (542,732)
Ryerson (30,892)
Accounting (780)
ACC 414 (25)
Amy Aubin (2)
Lecture

Chapter 1

3 Pages
208 Views

Department
Accounting
Course Code
ACC 414
Professor
Amy Aubin

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Chapter 1 the Canadian Financial Reporting Environment
Accounting t identifies, measures, analyses and communicates financial information about economic
entities to various users (decision makers)
Managerial Accounting t communicating financial info to internal decision makers
Role of Financial Reporting
- Provides historical info
- Used by both internal & external users
o Primary External users: investors & creditors
Government, auditors, competitors, customers, suppliers, regulatory agencies
Financial Statements
- Reports from management to owner, summarize how company perform during period, used to
make informed decisions; useful & decision relevant
- Objective: provide info about
1. v]Ç[}v}u]}µo]u~o]]o]]
2. Changes in those resources & claims
Major Financial Statements
1. Balance sheet
2. Income statement
3. Statement of cash flows
4. ^uv}(ZZ}o[~}Áv[µ]Ç
- Note disclosure
- Other forms of financial reporting: ]v[oU}µUP}Àvuv}]vPUvÁ
releases, management forecasts, Management Discussion & Analysis (MD & A)
- Securities commissions & stock exchanges monitor to ensure full disclosure of material info
- Credit rating agencies & analysts monitor & analyze info produced by company, signs of change
Management Bias
- Preparation of financial statements = responsibility of internal management, may lead to
preparing statements that report enterprise in its best interests
- Reasons: reflect positive management stewardship, bonuses, profits, share price, voÇ[
expectations, compensation
Standard Setting Process
1. Canadian Institute of Chartered Accountants (CICA)
2. Accounting Standards Board (AcSB) of the CICA
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Description
Chapter 1 the Canadian Financial Reporting Environment Accounting J identifies, measures, analyses and communicates financial information about economic entities to various users (decision makers) Managerial Accounting J communicating financial info to internal decision makers Role of Financial Reporting - Provides historical info - Used by both internal & external users o Primary External users: investors & creditors Government, auditors, competitors, customers, suppliers, regulatory agencies Financial Statements - Reports from management to owner, summarize how company perform during period, used to make informed decisions; useful & decision relevant - Objective: provide info about 1. L][Z }L}K] Z} Z o]KZ~ZZZo]]o]]Z 2. Changes in those resources & claims Major Financial Statements 1. Balance sheet 2. Income statement 3. Statement of
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