COMM-3016EL Chapter Notes - Chapter 1: Taxation In Canada, Efficient-Market Hypothesis, Information Asymmetry
15 Jan 2018
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Chapter 1 the ca(cid:374)adia(cid:374) fi(cid:374)a(cid:374)cial reporti(cid:374)g e(cid:374)viro(cid:374)(cid:373)e(cid:374)t. Accounting - the identification, measurement, and communication of financial information about economic entities to interested persons. Financial accounting the process that culminates in the preparation of financial reports that cover all the enterprise"s business activities and that are used by both internal and external parties (investors, creditors, etc. ) Financial statements the principal way of communicating financial info to those outside an enterprise; these statements give the firm"s history, quantified in terms of money. Capital allocation the process by which accounting enables investors and creditors to assess the relative returns and risks associated with investment opportunities and thereby channel resources more effectively. In canada, the primary exchange mechanisms for allocating resources are debt and equity markets, which include both public stock markets/exchanges and private sources, and financial institutions. Stakeholders parties who have something at risk in the financial reporting environment, such as their salary, job, investment, or reputation.
