ACCTG 101 Lecture Notes - Lecture 8: Internal Control, Financial Statement, Information Asymmetry
Document Summary
More inclusive way of measuring performance and position. Limited since historical transaction base of record keeping better suited to measure past performance than future. Accounting incomplete since it reports the results of actions not reasons for actions. Evidence based accounting procedures may not relate very well to economic concepts of earning. Requires evidence to support entries and is conservative rather than optimistic. Criteria for when/how to recognise revenues/expenses are arbitrary and subjective. Included in accrual and not cash accounting in the public sector. Non cash assets land, cars, buildings . Liabilities including unpaid employee entitlements and long term contractual obligations. Changing value of financial assets and liabilities. Full cost of department and gov activities and revenues generated. Cost of consuming assets which is included in expenses. Value of g/s received free of charge from other bodies. A process effected by an entity"s board of directors, management and other personnel.
