Chapter 1 Financial Accounting and Accounting Standards(中级会计)概要1.ppt

Chapter 1: Financial Accountingand Accounting Standards Identify the major financial statements and other means of financial reporting. Explain how accounting assists in the efficient use of scarce resources. Identify some of the challenges facing accounting. Identify the objectives of financial reporting.? Explain the need for accounting standards. Identify the major policy-setting bodies and their role in the standards-setting process. Explain the meaning of generally accepted accounting principles. Describe the impact of user groups on the standards-setting process. Understand issues related to ethics and financial accounting. Accounting identifies, measures and communicates financial information. This information is about economic entities. Information is communicated to interested parties such as investors, creditors, unions and governmental agencies. The objectives are specified in Statement of Financial Accounting Concepts No. 1. The objectives are as follows: Information provided must be useful in investment and credit decisions. Information must be useful in assessing cash flow prospects. Information must be about enterprise resources, claims to those resources and changes therein. The profession has developed GAAP that present fairly, clearly and completely the financial operations of the enterprise. GAAP consist of authoritative pronouncements issued by certain accounting bodies. Securities and Exchange Commission (SEC) American Institute of Certified Public Accountants (AICPA) Financial Accounting Standards Board (FASB) Governmental Accounting Standards Board (GASB) The FASB enjoys the following advantages compared to its predecessor, the Accounting Principles Board: * smaller membership * greater autonomy * increased independence of members * broader representation on the Board In establishing financial standards, the FASB follows a due process procedure. The due process procedure gives time to interested persons t