MGTA02H3 Chapter Notes - Chapter 4: Forensic Accountant, Salary, Management Consulting

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31 Oct 2010
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WHAT IS ACCOUNTING AND WHO USES IT?
-accounting: a comprehensive system for collecting, analyzing, and communicating financial
information
-bookkeeping: recording accounting transactions
-accounting information system (AIS): an organized procedure for identifying, measuring,
recording, and retaining financial information so that it can be used in accounting statements
and management reports
-many users for accounting information: business managers, employees and unions, investors...
WHO ARE ACCOUNTANTS AND WHAT DO THEY DO
-Controller: The individual who manages all the firm’s accounting activities
Financial and Managerial Accounting
-financial accounting system: the process whereby interested groups are kept informed about
the financial condition of a firm (concerned with external users like consumers, union...)
-helps ensure users can compare information from different or same company
-information in such reports is mostly historical (occurred in past accounting periods)
-managerial (management) accounting: internal procedures that alert managers to problems
and aid them in planning and decision making
-designed to aid in planning, they are forward looking rather than historical
Professional Accountants
-Chartered accountants (CA): an individual who has met certain experience and education
requirements and has passed a licensing examination; acts as an outside accountant for other
firms
-Certified general accountant (CGA): an individual who has completed an education program
and passed a national exam; works in private industry or a CGA firm
-certified management accountant (CMA): an individual who has completed a university
degree, passed a national examination, and completed a strategic leadership program; works in
industry and focusses on internal management accounting
Accounting Services
-audit: an accountant’s examination of a company’s financial records to determine if it used
proper procedures to prepare its financial reports
-forensic accountant: an accountant who tracks down hidden funds in business firms,
usually as part of a criminal investigation
-generally accepted accounting principles (GAAP): standard rules and methods used by
accountants in preparing financial reports
-tax services are also performed to help clients with tax returns
-management consulting services: specialized accounting services to help managers resolve a
variety of problems in finance, production scheduling, and other areas
Private Accountants
-private accountant: an accountant hired as a salaried employee to deal with a company’s day-
to-day accounting needs
MGTA04 Chapter 4
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Document Summary

Accounting: a comprehensive system for collecting, analyzing, and communicating nancial information. Accounting information system (ais): an organized procedure for identifying, measuring, recording, and retaining nancial information so that it can be used in accounting statements and management reports. Many users for accounting information: business managers, employees and unions, investors Who are accountants and what do they do. Controller: the individual who manages all the rm"s accounting activities. Nancial accounting system: the process whereby interested groups are kept informed about the nancial condition of a rm (concerned with external users like consumers, union) Helps ensure users can compare information from different or same company. Information in such reports is mostly historical (occurred in past accounting periods) Managerial (management) accounting: internal procedures that alert managers to problems and aid them in planning and decision making. Designed to aid in planning, they are forward looking rather than historical.

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