...in which the FASB has received little political interference. True False | 6. | The Public Reform and Investor Protection Act of 2002 (Sarbanes-Oxley) changed the entity responsible for setting auditing standards in the United States. True False | 7. | A rules-based approach to standard setting stresses professional judgment as opposed to following a list of rules. True False | 8. | Under federal securities laws, the SEC has the authority to set accounting standards in the United States. True False | 9. | The primary responsibility for properly applying GAAP when communicating with investors and creditors through financial statements lies with a firm's auditors. True False | 10. | Auditors play an important role in the resource allocation process by adding credibility to financial statements. True False | 11. | The purpose of the conceptual framework is to provide a structure and framework for a consistent set of GAAP. True False | 12. | In the United States the...
Words: 17634 - Pages: 71
...assets. | | timeliness. | | forward-looking information. | | financial measurements | Self Test, Question 4 | | | | Correct. | | | All of the following are objectives of financial reporting except to provide information: | that is useful in investment and credit decisions. | | about enterprise resources, claims to those resources, and changes in them. | | about the management and major shareholders of an enterprise. | | that is useful in assessing cash flow prospects | Self Test, Question 5 | | | | Correct. | | | The term GAAP means: | generally accepted accounting practices. | | generally accepted accounting purposes. | | generally accepted accounting principles. | | generally accepted auditing practices. | Self Test, Question 6 | | | | Correct. | | | Which one of the following organizations has not been instrumental in the development of financial accounting standards? | SEC. | | IMA. | | AICPA. | | FASB | Self Test, Question 7 | | | |...
Words: 3972 - Pages: 16
...cash-generating ability. D. It is easy to understand and all information required to measure it is factual. AACSB: Reflective thinking Bloom's: Knowledge Learning Objective: 01-01 Describe the function and primary focus of financial accounting. Level of Learning: Medium 30. Which of the following groups is not among financial intermediaries? A. Mutual fund managers B. Financial analysts C. CPAs D. Credit rating organizations AACSB: Reflective thinking Bloom's: Knowledge Learning Objective: 01-01 Describe the function and primary focus of financial accounting. Level of Learning: Medium 31. Which of the following was the first private sector entity that set accounting standards in the United States? A. Accounting Principles Board B. Committee on Accounting Procedure C. Financial Accounting Standards Board D. AICPA AACSB: Reflective thinking Bloom's:...
Words: 2702 - Pages: 11
...as a foundation for a more detailed study of financial statements, the way the elements of these statements are measured, and the concepts underlying these measurements and related disclosures. Learning Objectives LO1–1 Describe the function and primary focus of financial accounting. LO1–2 Explain the difference between cash and accrual accounting. LO1–3 Define generally accepted accounting principles (GAAP) and discuss the historical development of accounting standards, including convergence between U.S. and international standards. LO1–4 Explain why the establishment of accounting standards is characterized as a political process. LO1–5 Explain factors that encourage high-quality financial reporting. LO1–6 Explain the purpose of the conceptual framework. LO1–7 Identify the objective and qualitative characteristics of financial reporting information, and the elements of financial statements. LO1–8 Describe the four basic assumptions underlying GAAP. LO1–9 Describe the recognition, measurement and disclosure concepts that guide accounting practice. LO1–10 Contrast a revenue/expense approach and an asset/liability approach to accounting standard setting. LO1–11 Discuss the primary differences...
Words: 7130 - Pages: 29
...Estimation of Cash Flows NPV Equivalent Annual Cost Qualitative Considerations Sensitivity Analysis Conclusions and Recommendations 10 March 2015 2 Overview of Fonderia di Torino ● Founded in 1912 by Benito Cerini, located in Milano ● Specialized in the production of precision metal castings (automotive, aerospace and construction equipment) ● Its well-known safety pieces made them conclude contracts with Peugeot, BWM, Ferrari Problem Definition ● Original equipment manufactures(OEMS) shared confidential market demand information, ● Provided cheap loans to support capital expansion ● Benito Cerini predicted a postwar demand, enabled to meet that demand ● From 1940’s to 2000’s, the pace of growth was stable ● In 1991, on the Milan stock exchange (55% of the shared in Cerini family’s hands) 10 March 2015 3 Problem Definition: Should we replace old equipment or not? Old Machines Vulcan Mold-Maker ● Semi-automated machines; ● Automated molding machine; ● Workers stamped impressions under heat and high pressure; ● Prepares sand molds to obtain iron castings; ● Labor intensive process → training/retraining to obtain consistency in mold quality; ● Replace old machines; ● Heavy lifting from workers → medical claims for back injuries doubled in the last 10 yrs due to production shifting towards heavy items. ● Offer additional capacity for expansion; 10 March 2015 ● Offer improvements in quality; ● Size...
Words: 1043 - Pages: 5
...the reaction. In order to characterize them, it is important to purify them. 4. PROCESSES FOR PURIFICATION 1. Crystallization 2. Sublimation 3. Distillation 4. Chromatography 5. Differential Extraction 6. Qualitative Analysis 5. 1. CRYSTALLIZATION Aim To separate a solid compound in pure and geometrical form. Principle A saturated solution of the impure substance in a suitable solvent is made at a temperature higher than the room temperature. On cooling this solution, the substance reappears in the form of well shaped crystals. Process Purification by crystallization involves the following steps: Choice of solvent Preparation of solution Filtration of the solution Separating the crystals Drying of crystals Example Crystallisation of Phthalic acid 6. 2. SUBLIMATION Aim To separate volatile solids, which pass directly into vapour state on heating from a non-volatile solid. Principle A mixture of solid substances, such as camphor, benzoic acid, ammonium chloride, iodine etc., containing non-volatile substances, when heated, change directly into vapour without passing through the liquid state. Process 7. Fig :-Sublimation 8. 3. DISTILLATION Aim To separate a solution of a solid in a liquid and for separating a solution of two liquids whose boiling points are different. Principle Distillation involves the conversion of a liquid into its vapors upon heating and then cooling the vapors back into the liquid. Depending on the difference in boiling points of liquids. Types of distillation...
Words: 853 - Pages: 4
...service, redesigning support.dell.com, revamping of extended warranties, and a redesign of the Dell.com online configurator experience to name a few. The scope and direction of these initiatives – and others – are shaped by what we hear from customers. Dell looks forward to sharing progress on them in upcoming conversations. 3.What is Dell's unique selling point? • Biggest PC maker in the world. • They deal directly with the customers with no use of a middle man. • They design the computer to the customer's specifications. • Their assembly is done at a fairly inexpensive cost. • They offer their customers the ability to track their delivery. • They are the number one PC provider for medium and small businesses across the US for 10 straight years. • They ship around one hundred and forty thousand...
Words: 2192 - Pages: 9
...C H A P T E R 2 CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING LEARNING OBJECTIVES After studying this chapter, you should be able to: •1 •2 •3 •4 Describe the usefulness of a conceptual framework. Describe efforts to construct a conceptual framework. Understand the objective of financial reporting. Identify the qualitative characteristics of accounting information. Define the basic elements of financial statements. •6 •7 Describe the basic assumptions of accounting. Explain the application of the basic principles of accounting. Describe the impact that constraints have on reporting accounting information. •8 •5 What Is It? Everyone agrees that accounting needs a framework—a conceptual framework, so to speak—that will help guide the development of standards. To understand the importance of developing this framework, let’s see how you would respond in the following two situations. SITUATION 1: “Taking a Long Shot . . . ” To supplement donations collected from its general community solicitation, Tri-Cities United Charities holds an Annual Lottery Sweepstakes. In this year’s sweepstakes, United Charities is offering a grand prize of $1,000,000 to a single winning ticket holder. A total of 10,000 tickets have been printed, and United Charities plans to sell all the tickets at a price of $150 each. Since its inception, the Sweepstakes has attracted area-wide interest, and United Charities has always been able to meet its sales target. However, in the...
Words: 22128 - Pages: 89
...evaluates accounting issues from a FASB perspective. We will discuss issues from the FASB’s conceptual framework, but also will try to think about others’ perspectives as well. Before we talk about the conceptual framework, we will discuss the structure of the ultimate product of the financial reporting process – the company’s annual report/10-K. What does it look like? What information is typically included? 1. Description of the company’s business and risk factors 2. Management’s Discussion and Analysis (MD&A) 3. Comparative Financial Statements (including notes to financial statements) 4. Independent Auditor’s Report on Financial Statements 5. Management’s Report on Financial Statements and Internal Controls 6. Auditor’s report on internal controls 7. Who develops financial reporting standards in the U.S.? That is, who influences Generally Accepted Accounting Principles (GAAP)? (1) Securities and Exchange Commission (2) AICPA (1938-1973) (3) FASB What constitutes GAAP? Generally accepted accounting principles have authoritative support. * Either a rule-making body has established a principle or, over time, a practice has been adopted as appropriate because of universal application. What are the sources of GAAP? The Codification simplifies GAAP and provides it all in one place. * Its purpose is to integrate and topically organize all relevant accounting pronouncements in a searchable database. EXCEPTION TO THE ABOVE RULE:...
Words: 2307 - Pages: 10
...website. After all, new businesses call for new performance measures, right? Not necessarily. In fact, these indicators failed to show any consistent relationship between profits and website visits. Eventually, as the graphs below show, the profits never materialized, and stock prices fell. The lesson here: Although the new economy may require some new measures, investors need to be careful not to forget the reliable traditional ones. PRICELINE.COM Net unique offers by users 3.0 million 2.0 1.0 0 I II III IV 1999 I II III IV 2000 DRUGSTORE.COM Unique customers 2.0 million 1.5 1.0 0.5 0 I II III IV 1999 I II III IV 2000 Stock price $120 a share 80 40 0 I II III IV 1999 I II III IV 2000 2000-IV close $2.13 Stock price $40 a share 30 20 10 0 I II III IV 1999 I II III IV 2000 2000-IV close $1.03 Source: Story and graphs adapted from Gretchen Morgenson, “How Did They Value Stocks? Count the Absurd Ways,” New York Times (March 18, 2001), section 3, p. 1. 34 Copyright ©2008 John Wiley & Sons, Inc. Preview of Chapter 2 As the opening story indicates, users of financial statements need relevant and reliable information. To help develop this type of financial information, financial accounting and reporting relies on a conceptual framework. In this chapter, we discuss the basic concepts underlying the conceptual framework, as follows. CONCEPTUAL FRAMEWORK U N D E R LY I N G F I N A N C I A L A C C O U N T I N...
Words: 23554 - Pages: 95
...April 2009 Quality of Financial Reporting: measuring qualitative characteristics Ferdy van Beest Geert Braam Suzanne Boelens Nijmegen Center for Economics (NiCE) Institute for Management Research Radboud University Nijmegen P.O. Box 9108, 6500 HK Nijmegen, The Netherlands http://www.ru.nl/nice/workingpapers 1 Abstract We construct a compound measurement tool to comprehensively assess the quality of financial reporting in terms of the underlying fundamental qualitative characteristics (i.e. relevance and faithful representation) and the enhancing qualitative characteristics (i.e. understandability, comparability, verifiability and timeliness) as defined in ‘An improved Conceptual Framework for Financial Reporting’ of the FASB and the IASB (2008). The operationalization of these qualitative characteristics results in a 21-item index. Using 231 annual reports from companies listed at US, UK, and Dutch stock markets in 2005 and 2007, we test our compound measurement tool on internal validity, inter-rater reliability (Krippendorff’s alpha) and internal consistency (Cronbach’s alpha). Our findings suggest that the measurement tool used in this study is a valid and reliable approach to assess the quality of financial reports. The measurement tool contributes to improving the quality assessment of financial reporting information, fulfilling a request from both the FASB and the IASB (2008) to make the qualitative characteristics operationally measurable. Direct correspondence...
Words: 13269 - Pages: 54
...2011 Heber W. Howard Abstract This report has been made to explain the direct relationship that the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) have and how crucial the unification of these two setting standards entities are in these current days, where financial transactions are expected to perform globally. In addition, it is important to have a Master of Science in accountancy in order to prepare professionals in accounting to provide reliable information for this new environment of economic and financial transactions. The Financial Accounting Standards Board (FASB), a non-governmental entity, was created in 1973, after the wheat committee decided to abolish the Accounting Principles Board (APB) as a result of criticism against the objectivity of members. The FASB consists of seven members, which are selected for renewable periods of five year terms with well-paid full time positions. This entity receives funding from the Securities of Exchange Committee (SEC). According with Kieso, Weigandt and Warfield (2007), the purpose of FASB is “to establish and improve standards of financial accounting and reporting for the guidance and education of the public, which includes issuers, auditors, and users of financial information.” The International Accounting Standards Board (IASB) is a private entity formed in 1973, based in London, England. The IASB is currently formed of fifteen members selected for a renewable term of...
Words: 1134 - Pages: 5
...TITLE: Why volunteer? Factors that motivate volunteer behaviour in a church, from the perspective of the volunteer. AUTHUR: 31889638 HMPYC80 Assignment 02 Page 1 Unique Number: 657101 COVER LETTER Mr James Guilder Kenneth Copeland Ministries Milton Office Park Avocet Close Bromhoff 2196 Dear Sir In our most recent meeting you expressed some frustration at the ministries inability to retain volunteers for its various projects. I believe I may be able to assist in this regard. As you know, I am currently an honours student in Psychology at the University of South Africa (UNISA) and as such I have a special interest in the factors which motivate the behaviour of different individuals. As part of my honours course work I am required to complete a research project, which is to be submitted to my peers for review. My research topic for my course work is “Why do people do volunteer work?” Since this research topic could potentially aid the ministry in better understanding how to attract and retain volunteers it seems appropriate to propose and request permission to complete this research project on behalf of the ministry. I therefore herewith include my research proposal. I hope to hear from you soon. Kind regards, Candice Keen 5 Disa Street Morningside Ext 2 2196 Page 2 Sandton Why volunteer? The experiences and motivations of church volunteers. Research Project Overview and Purpose Volunteers are a vital part of how a church...
Words: 2061 - Pages: 9
...OVERVIEW Qualitative Research Methods: A Data Collector’s Field Guide Module 1 Qualitative Research Methods Overview F A M I L Y H E A L T H I N T E R N A T I O N A L Qualitative Research Methods Overview OVERVIEW T • • • • • • his module introduces the fundamental elements of a qualitative approach to research, to help you understand and become proficient in the qualitative methods discussed in subsequent modules. We recommend that you consult the suggested readings at the end of the module for more in-depth treatment of the foundations of qualitative research. This module covers the following topics: Introduction to Qualitative Research Comparing Qualitative and Quantitative Research Sampling in Qualitative Research Recruitment in Qualitative Research Ethical Guidelines in Qualitative Research Suggested Readings Introduction to Qualitative Research What is qualitative research? Qualitative research is a type of scientific research. In general terms, scientific research consists of an investigation that: • • • • • seeks answers to a question systematically uses a predefined set of procedures to answer the question collects evidence produces findings that were not determined in advance produces findings that are applicable beyond the immediate boundaries of the study Qualitative research shares these characteristics. Additionally, it seeks to understand a given research problem or topic from the perspectives of the local population it involves...
Words: 5199 - Pages: 21
...Title: Role of accounting on business behaviors impacted by tax changes in Malaysia Justification There are many factors influence the changes of accounting importance where the role of accounting evolves along with the business changes affected by these factors. One of the factors that affect role of accounting in business field is tax. In Malaysia, Tax is generally divided into 2 types which are direct and indirect tax. Direct tax can be defined as tax which is imposed straight to the taxpayer. In short, the payment of tax is between taxpayer towards government. Examples of direct tax are income tax from employee salary, corporation tax, property tax, and etc. Meanwhile, indirect tax is a type of charge that can be transferred to the other person. A good example of indirect tax is restaurant that collect tax charge of the food’s sold from the customer (sales tax). Other examples of indirect tax are custom duty, central excise duty, and service tax). In brief, the history of Malaysia tax was started with more dependency towards indirect tax where establishment of direct tax has only started to take effect from 1 January 1948. This establishment has changed the trend of Malaysia tax which depends more and more on direct tax until today. In 2009 itself, government revenue has grown to 48.6% from direct tax. The urgency of understanding changes in accounting role due to tax, become important because of several reasons. Firstly, as the globalization of the economy develops...
Words: 1847 - Pages: 8
