...Accounting Reporting Criteria When financial mishaps such as the Tyco and Enron scandals came to light; it was evident that the Government needed to step in to ensure that corporations were reporting their finances accurately and honestly. For this reason Congress passed the Sarbanes Oxley Act (SOx) in 2002. The Act details the requirements for financial reporting for public corporations and is overseen by the Securities and Exchange Commission. The Sarbanes Oxley Act requires all publically traded corporations to follow strict requirements for financial accounting and reporting. Boeing and Airbus are the two leading rival builders of aircraft, and they do not follow the same regulations for internal controls. One of the reasons for these differences is due to the fact that Boeing in a domestic corporation and Airbus is an international corporation. For the purpose of this paper, Team E will compare and contrast regulatory environment, issues with foreign currency, and the differences in GAAP of the two corporations. The Boeing Company takes its regulatory governance very seriously and the company has worked very hard to meet the challenge of SOx compliance. In order to ensure the company is SOx compliant, Boeing has employed significant resources. One of these resources is the Corporate Audit organization. Corporate Audit is responsible for reviewing the internal control system to assure that all organizations are achieving the regulatory objectives and that the system is...
Words: 394 - Pages: 2
...The Home Depot Values The Home Depot’s values guide the beliefs and actions of all associates on a daily basis. Our values are the fabric of the Company’s unique culture and are central to our success. In fact, they are our competitive advantage in the marketplace. Associate pride and our “orangeblooded” entrepreneurial spirit are distinctive hallmarks of our culture. 1. Taking care of our people: The key to our success is treating people well. We do this by encouraging associates to speak up and take risks, by recognizing and rewarding good performance and by leading and developing people so they may grow. 2. Giving back to our communities: An important part of the fabric of The Home Depot is giving our time, talents, energy and resources to worthwhile causes in our communities and society. 3. Doing the right thing: We exercise good judgment by "doing the right thing" instead of just "doing things right." We strive to understand the impact of our decisions, and we accept responsibility for our actions. 4. Excellent customer service: Along with our quality products, service, price and selection, we must go the extra mile to give customers knowledgeable advice about merchandise and to help them use those products to their maximum benefit. 5. Creating shareholder value: The investors who provide the capital necessary to allow our company to grow need and expect a return on their investment. We are committed to providing it. 6. Building strong...
Words: 841 - Pages: 4
...958 The purpose of this guide is to provide guidance to accounting students on the application of accounting standards. In order to do this, a brief outline of the Accounting Standards together with the Framework will be given along with an example to illustrate how to use the Accounting standards and the appropriate accounting treatment. The Accounting Standards provide a specific way in which accounting concepts are to be applied. Not only is it their aim to standardise general purpose financial reporting and to improve the quality of financial reporting across the whole range of reporting entities but to achieve relevant, reliable and comparable financial statements. As the Accounting Standards are often complex and lengthy and with existing standards often changing, one needs to become familiar with how to interpret and access the information in the standards rather than memorising them. There are many sources that can be used in order to find and apply the correct Accounting Standard. The Financial Reporting Handbook, the Australian Accounting Standards Board (http://www.aasb.gov.au/), the Institute of Chartered Accountants in Australia and the National Institute of Accountants are just but a few available. The Framework identifies key concepts for the Preparation and Presentation of Financial Statements. The Framework provides assistance with the promotion of harmonisation of regulations and accounting standards and procedures relating to the presentation of...
Words: 972 - Pages: 4
...Financial Accounting Standards Board ORIGINAL PRONOUNCEMENTS AS AMENDED Statement of Financial Accounting Concepts No. 5 Recognition and Measurement in Financial Statements of Business Enterprises Copyright © 2008 by Financial Accounting Standards Board. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the Financial Accounting Standards Board. CON5 Statement of Financial Accounting Concepts No. 5 Recognition and Measurement in Financial Statements of Business Enterprises STATUS Issued: December 1984 Affects: No other pronouncements Affected by: No other pronouncements HIGHLIGHTS [Best understood in context of full Statement] • This Statement sets forth recognition criteria and guidance on what information should be incorporated into financial statements and when. The Statement provides a basis for consideration of criteria and guidance by first addressing financial statements that should be presented and their contribution to financial reporting. It gives particular attention to statements of earnings and comprehensive income. The Statement also addresses certain measurement issues that are closely related to recognition. • Financial statements are a central feature of financial reporting—a principal means of communicating financial information to those outside an...
Words: 16879 - Pages: 68
... |b. auditing. | | |c. accounting. | | |d. economics. | | | | |2. |In the audit of historical financial statements, which of the following accounting bases is the most common? | |easy | | |c |a. Regulatory accounting principles. | | |b. Cash basis of accounting. | | |c. Generally accepted accounting principles. | | |d. Liquidation basis of accounting....
Words: 2738 - Pages: 11
...classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called: c a. finance. b. auditing. c. accounting. d. economics. 2. easy In the audit of historical financial statements, which of the following accounting bases is the most common? c a. Regulatory accounting principles. b. Cash basis of accounting. c. Generally accepted accounting principles. d. Liquidation basis of accounting. 3. easy Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another party is a(n): b a. accounting and bookkeeping service. b. attestation service. c. assurance service. d. tax service. 4. Three common types of attestation services are: easy a. audits, reviews, and “other” attestation services. a b. audits, verifications, and “other” attestation services. c. reviews, verifications, and “other” attestation services. d. audits, reviews, and verifications. 5. (SOX) easy The organization that is responsible for providing oversight for auditors of public companies is called the ________. d a. Auditing Standards Board. b. American Institute of Certified Public Accountants. c. Public Oversight Board. d. Public Company Accounting Oversight Board. 6. (SOX) The Sarbanes-Oxley Act applies to which of the following companies? easy a. All companies. c b. Privately held companies. c. Public companies. d. All...
Words: 2737 - Pages: 11
...auditing? Distinguish between auditing and accounting. Importance of auditing in reducing information risk. 2. Distinguish audit services from other assurance and non-assurance services provided by CPAs. 3. Three main types of audits. 4. How to become a CPA? Identify the primary types of auditors. 2 What is auditing? Evaluating 3 Nature of Auditing Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent, independent person. 4 Audit Reporting -- (Expressing Opinions) The final stage in the auditing process is preparing the Audit Report, which is the communication of the auditor’s findings to users. 5 Information and Established Criteria To do an audit, there must be information in a verifiable form and some standards (criteria) by which the auditor can evaluate the information. 6 Accumulating Evidence and Evaluating Evidence Evidence is any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria. Transaction data Client inquiry Written and electronic Communications with outsiders Observations 7 Competent, Independent Person The auditor must be qualified to understand the criteria used and must be competent to know the types and...
Words: 2208 - Pages: 9
...| Literature Review of XBRL | | | | | Group 14： | | | Literature Review of XBRL ------------------------------------------------- Z Abstract XBRL (eXtensible Business Reporting Language) is a standard XML reporting language to enhance the efficiency, reliability and accuracy of financial reporting. Since its foundation in 1998, XBRL has been developing rapidly in the world. This paper teases out and discusses the literature researches of XBRL from 6 aspects: the production bases of XBRL, the effect of XBRL, the classification criteria formulation of XBRL, the auditing assurance of financial reports based on XBRL, the implementation of XBRL in different countries and some researches about XBRL in China, which reflects the current status of research about XBRL relatively fully. ------------------------------------------------- Keywords: XBRL, Auditing assurance, Classification criteria 1. Introduction XBRL is one variant of XML (eXtensible Markup Language) for business reporting. XBRL defines financial data on the web with explicit semantics in a machine-readable format, making automated data analysis possible. XBRL is a standard XML reporting language to enhance the efficiency, reliability and accuracy of financial reporting. Data in XBRL format does not need to be converted from one application to another because data are independent of applications by using standard tags for data items (Farewell, 2006). The financial information is presented to the public on...
Words: 5525 - Pages: 23
...and evaluate evidence about your company’s financial position, results of its operations, and cash flows for the purpose of expressing our opinion on whether they are presented fairly in conformity with established criteria—usually generally accepted accounting principles (GAAP)(Arens, Elder & Beasley, 2006). A compliance audit will assist us to obtain and evaluate evidence to determine whether your company’s financial or operating activities conform to specified conditions, rules, or regulations. The established criteria in this type of audit may come from a variety of sources. The Sarbanes-Oxley Act of 2002 requires companies to have a dual-purpose audit that audits both the financial statements and management’s assertion as to whether it has complied with criteria regarding an adequate system of internal control over financial reporting (Arens, Elder & Beasley, 2006). An operational audit will help us to obtain and evaluate evidence about the efficiency and effectiveness of your company’s operating activities in relation to specified objectives (Arens, Elder & Beasley, 2006) In addition, our company provides following attestation services: audit of historical financial statements, effectiveness of internal control over financial reporting, review of historical financial statements, and other attestation services. An audit of...
Words: 1285 - Pages: 6
...Acct 522 Current Topics in Financial Reporting Zhipeng Cao CIN: 300443421 Introduction The most influential accounting reporting criteria today is the International Financial Reporting Standards (IFRS) by and U.S Generally Accepted Accounting Principles (U.S. GAAP). These two different accounting standards have various emphases. In short, IFRS states principles and it leaves the decision-making in everyday questions for accountants, while US GAAP consists of very detailed measures. Under the globalization environment, many companies are operating under a global scale; however, each country has its own accounting standard which makes the translation more difficulty. So the demand for the convergence of the two most important standards comes out. (Accounting Reporting Criteria, 2009, March 23). In this paper, I will put more emphasis on the comparison of the detail differences between International Financial Reporting Standards (IFRS) and U.S Generally Accepted Accounting Principles (U.S. GAAP). I will also pay attention to the convergence of the two accounting principles. Body 1 In this part, I will mainly discuss the difference between IFRS vs. US GAAP; the table below shows the brief summary of the major differences between IFRS vs. US GAAP. I would like to discuss some of them. General approach The most significant difference between IFRS and U.S. GAAP exist in the general approach. IFRS mostly provides the basic accounting principle with limited application...
Words: 2150 - Pages: 9
...Is the RDR the future in differential reporting for for-profit entities? By Scott Sharp In March 2012, the External Reporting Board (XRB) proposed a number of changes to the New Zealand Accounting Framework, which enabled them to come to a decision in terms of differential reporting for for-profit entities. The XRB have chosen to align New Zealand with Australia and implement NZ IFRS Reduced Disclosure Regime (RDR). Is this the right decision moving forward in differential reporting? There is to be a four-tier structure with different reporting standards applying to each tier, however the bottom two tier are only transitional which will be removed according to legislative changes enforced. This allows us to focus on tier 2 for differential reporting which in order to qualify for the new RDR approach entities must be not publicly accountable or non-large public sector entities which elect to be in tier 2. Entities that are publicly accountable either trade in the capital markets and/or holds assets for a broad group of outsiders as one of its primary businesses. For a for-profit public sector entity to be considered “large” and thus placed in tier 1, it must have expenses exceeding $30 million. Under the current approach to differential reporting that was issued in 1994, entities must; not be publicly accountable, have all of its owners as member of the governing body at the end of the reporting period, and be not large. The criteria for “large” is a little different being that...
Words: 1121 - Pages: 5
...Possible Method of Incorporating IFRS,” the staff will study different ways to incorporate IFRS into the U.S. financial reporting system and ask the public for feedback if needed. The staff has observed “…how other jurisdictions incorporate IFRS into their reporting systems and how those jurisdictions address concerns regarding the regulatory responsibility of the jurisdiction’s capital market regulators, the impact on national standard setters, and the consequences for other bodies responsible for the broader accounting standard-setting process” (page 4). The staff’s research has shown that “…jurisdictions generally have incorporated or intend to incorporate IFRS into their reporting requirements for listed companies by either: (1) full use of IFRS as issued by the IASB or (2) use of IFRS after some form of national or multinational incorporation process, which could lead to a full use of IFRS as issued by the IASB or some local variation thereof” (page 4). According to the staff’s research, very few jurisdictions use the first approach. Majority of jurisdictions use the second approach because it is easier to address country-specific issues, yet, it could impact the use of a single set of globally accepted accounting standards. The SEC and its staff continue researching different approaches to figure out which one will help lead to a consistent set of accounting standards, internationally. b. http://www.ifrs.org/Alerts/PressRelease/Documents/GovernanceReviewFinalReportFeb2012...
Words: 822 - Pages: 4
...REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Apollo Shoes, Inc. We have audited the accompanying balance sheets of Apollo Shoes, Inc., as of December 31, 2006 and 2005, and related statements for each of the years in the two-year period ended December 31, 2005. We have also audited management’s assessment including the Management’s Report on Internal Control over Financial Reporting, maintained by Apollo over the Financial reporting as of December 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The management of Apollo shoes is responsible for maintaining effecting internal control over financial reporting, its assessment of internal controls and for the financial statement. The responsibility of our firm is to express an opinion on the financial statements, an opinion on management’s assessment, and an opinion on the effectiveness of Apollo Shoe’s, Inc. internal controls over financial reporting based on our audit. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB). These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether there are effective internal controls in place over financial reporting. The audit of the financial statements...
Words: 625 - Pages: 3
...1A. Benefits that SEC believes will result from global accounting standardization through convergence: The SEC encourages the convergence of IFRS and GAAP because it believes that doing so will benefit U.S investors. The incorporation of IFRS in GAAP will protect the investors, maintain the fair representation of financial statements and increase comparability and material information for investors to make better decisions. The primary benefit will be the reduction in discrepancies in financial statements among different countries around the world. “SEC, with convergence, wants to reduce regulatory impediments to cross-border capital transactions that result from disparate national accounting standards.” [3] As noted on pages 5 and 8, paragraph 2 and 3 respectively, some additional benefits are: ● “Greater comparability for investors across firms and industries on a global basis; ● Reduced listing costs for companies with multiple listings; ● Increased competition among exchanges; ● Better global resource allocation and capital formation; ● Lowered cost of capital ● A higher global economic growth rate ● Improved financial statement comparability among companies worldwide; ● Streamlined accounting processes for multinational companies; and ● Easier access to foreign capital and improved liquidity, leading to a reduced cost of capital” [5,8] 1B. Areas of concern within the SEC’s work plan before execution of the use of IFRS by us issuers: “A Work Plan...
Words: 3330 - Pages: 14
...Adopting accounting choices for the public and private sectors often triggers debates all over the world. The Public Sector Accounting Standards Board (PSASB) holds the view to adopt a sector – neutral approach. However, debates often occur on whether reporting rules for the public sector should be identical to those which are applicable to the private sector. This essay will discuss the sector – neutral approach adopted by the board, the arguments on the application of accounting concepts which take heritage and community assets of accrual accounting as examples and their effect on meaningful financial information. According to the Institute of Internal Auditors (2011), public sector is comprised of governments, agencies and enterprises which are all publicly controlled or publicly funded and other entities that deliver public programs, goods or services. The new website of the Investopedia (2014) considers the private sector as the part of the economy that is not controlled by state, and is individuals and companies run for profit. Depending on the definitions, public sectors are usually owned or operated by governments, such as educational and health care bodies; private sectors are usually not owned or operated by governments, like retail stores and local businesses (PrivacySense, 2014). Though the differences exist between the two sectors, people hold different views on whether accounting choices suitable for the two sectors should be identical or not. Barton (1999, p....
Words: 1644 - Pages: 7
