toACF201andACF202LecturerCynthiaFortin,CPA,.pptVIP

Slide 1.* Slide 1.* Slide 1.* Slide 1.* Slide 1.* Welcome to ACF 201 and ACF 202 Lecturer: Cynthia Fortin, CPA, CMA Email: cynth_fortin@yahoo.ca Wechat: cynthiRepository for all documents: /haut * Accounting and Reporting on a Cash Flow Basis Chapter 1 * By the end of this chapter, you should be able to: explain the extent to which cash flow accounting satisfies the information needs of shareholders and managers; prepare a cash budget and operating statement of cash flows; explain the characteristics that makes cash flow data a reliable and fair representation; critically discuss the use of cash flow accounting for predicting future dividends. * * External users – Restricted information Quality of information Tensions between investors’ needs and management’s willingness to provide projections based on “best” estimates General-purpose reports Cannot provide detailed information for all user needs Shareholders’ primary concern. They are the owners and providers of economic resources * External users expect accountants to have: Technical expertise – IFRS compliance Commercial awareness – substance over form WHEREAS: Internal users – Accountants and Managers have: Access to detailed financial budget/actual results No statutory restriction on detail Companies operate on ‘need to know’ basis i.e managers only get the information they need to carry out their responsibilities to the best of their abilities * INTERNAL REPORTS – ACCOUNTANTS’ SKILLS Ability to provide reports specific to the needs; so, they are a good basis for decisions Skilled communicator Reports are clear and precise User confidence that reports are: Relevant and timely Objective and verifiable Reliable and complete in material respects Fair representations. * STEPS WHEN REPORTING TO USERS.SEE EXAMPLE PP.8-15 (PP.4-11) OF TEXT BOOK Figure 1.1 General financial decision model to illustrate the user/accountant interface * ILLUSTRATION OF CASH-BASED STATEMENTS Need to be famil