RSM220H1 Chapter Notes - Chapter 1-2: Canadian Securities Administrators, Earnings Before Interest And Taxes, Moral Hazard
Document Summary
Identification, measurement and communication of financial information about economic entities to interested persons. Never 100% accurate because they would have to look at 100% of the transactions and make sure they were accounted for correctly this isn"t practical and is too timely and costly o o. Instead they take a sample and determine that. Stakeholders: anyone who prepares, relies on, reviews, audits, or monitors financial info. Has an element of risk if the financial statements are wrong. First thing you do in a case: who is my user? : ex. if it"s a bank, you want to be really conservative since they want economic reality. Investors and creditors what"s at stake: investment/loan: the return on their investment, financial resources, time, whatever they invested in the first place. Management what"s at stake: job, bonus, reputation, salary increase, access to capital markets by company o.
