ACCY 202 Lecture Notes - Financial Statement, Audit
4 Sep 2013
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Document Summary
Ais: a set of interrelated activities, documents, and technologies designed to collect data, process it, and report information to a diverse group of internal and external decision makers in organizations. Process: use accounting process cycle to adjust and process the raw transaction details (journal entries, calculations, etc. ) Output: provision of four basic financial statements, summarized financial information and external decision making (information also relayed to internal decision makers in the output process, usually in more detail) Primary goal: allocation of limited resources to the production of those goods and services for which demand is great. Inadequate accounting and reporting conceals waste and inefficiency, thus preventing an efficient allocation of economic resources. Information risk: risk that the financial information used to make a decision is materially misstated. Auditors exist to reduce the probability of information risk. 1: unaudited financial statements may have been honestly, but carelessly prepared: error.
