Management and Organizational Studies 3360A/B Chapter Notes - Chapter 1: International Financial Reporting Standards, Financial Statement, Financial Accounting

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3360A/B
• Professor: Christina Maco

Document Summary

Financial statements and reporting: over the years, the accounting landscape has changed dramatically based on, spectacular business failures, capital market failures, near bankruptcies of several countries, globalization of capital and other markets, globalization of financial reporting standards. Increasing access to information: accounting is best described by its 3 essential characteristics, the identification, measurement and communication of financial information about economic entities to interested parties. Income statement: balance sheet, cash flows statement. International financial reporting standards: used by public companies, 4 financial statements. Information provided by accounting enables investors and creditors to compare the income and assets of companies and thus assess the risks and returns of different investment opportunities: capital allocation. Job, bonus, reputation, salary increase, access to capital markets by company. Information asymmetry: a condition in which some people have more information than others, why does it exist, capital markets are not necessarily fully efficient- not all info is incorporated into stock prices.