ADMS 3585 Chapter Notes - Chapter 1: Ontario Securities Commission, Financial Accounting Standards Board, International Accounting Standards Board
Document Summary
Is the process that culminates in the preparation of financial reports that covers all the enterprise"s business activities and that are used both by internals and externals parties. Financial statement:(ifrs: statement of financial position, statement of income/comprehensive income, statement of cash flows, statement of changes in equity. Financial statement(aspe): balance sheet, income statement, cash flow statement, shareholder"s equity. Financial reporting serve as a monitoring device of manager performance, especially when ownership is dispersed. Parties who have something at risk in the financial reporting environment. Provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decision in their capacity as capital providers. (decision useful approach) E. g: stakeholders who help in the efficient allocation of resources include financial analysts and regulators. Managers have access to more information than other stakeholders. The capital markets may attract wrong kinds of companies: moral hazard.