MGAC01H3 Chapter Notes - Chapter 1: Financial Statement, Income Statement, Management Accounting
Document Summary
Chapter 1 the canadian financial reporting environment notes. Users" needs: meeting all user needs is made more challenging when linked with the potential for management bias. Changing nature of the economy the knowledge-based companies that are beginning to dominate capital markets need more relevant models for measuring and reporting value in order to evaluate assets that are currently not recognized on the balance sheet. The essential characteristics of accounting are the (1) identification, measurement, and communication of financial information about (2) economic entities to (3) interested persons: explain how accounting makes it possible to use scarce resources more efficiently. Accounting provides reliable, relevant, and timely information to managers, investors, and creditors so that resources are allocated to the most efficient enterprises. Accounting also provides measurements of efficiency (profitability) and financial soundness: explain the meaning of stakeholder and identify stakeholders in financial reporting including what is at stake for each one.