[...]... not an objective of financial reporting? 1 Financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit, and similar decisions 2 Financial reporting should provide information to help present and potential investors and creditors and other users in assessing the amounts, timing, and uncertainty of... for cash flows 3 The primary focus of financial reporting is information about earnings and its components 4 Financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit, and similar decisions 5 The objectives are those of general-purpose external financial reporting by business enterprises The following... Sector While the SEC and congressional committees maintain active oversight of the FASB to ensure that the public interest is served, throughout its history the SEC has relied on 30 Introduction to Financial Reporting 30 Chapter 1 Introduction to Financial Reporting the Board and its predecessors in the private sector to establish and improve financial accounting and reporting standards In fulfilling... considered current standards The financial reporting issues referenced in this case are discussed in later chapters, using current requirements 28 Introduction to Financial Reporting 28 Chapter 1 Case 1-2 Introduction to Financial Reporting Standard Setting: “A Political Aspect” This case consists of a letter from Dennis R Beresford, chairperson of the Financial Accounting Standards Board, to Senator... well-developed and efficient because of users’ confidence that the financial information they receive is reliable Common accounting standards for the preparation of financial reports contribute to their credibility The mission of the FASB, an organization designed to be independent of all other business and professional organizations, is to establish and improve financial accounting and reporting standards... following objective: Financial reporting should provide information useful to present and potential investors and creditors and other users in making rational investment, credit, and similar decisions The information should be comprehensible to those having a reasonable understanding of business and economic activities and willing to study the information with reasonable diligence *Note: The standards referenced... owner-managers favor a distinction between financial reporting standards for small and large companies? Discuss d In your opinion, would CPAs in a small CPA firm view standards overload as a bigger problem than CPAs in a large CPA firm? Discuss e Comment on standards overload, considering Statement of Financial Accounting Concepts No 1, “Objectives of Financial Reporting by Business Enterprises.” Particularly... the reporting Monetary Unit Accountants need some standard of measure to bring financial transactions together in a meaningful way Without some standard of measure, accountants would be forced to report in such terms as 5 cars, 1 factory, and 100 acres This type of reporting would not be very meaningful There are a number of standards of measure, such as a yard, a gallon, and money Of the possible standards... bulletins 25 Introduction to Financial Reporting Chapter 1 Introduction to Financial Reporting 25 P 1-4 Required Answer the following multiple-choice questions: a Which of the following does the Financial Accounting Standards Board not issue? 1 Statements of Position (SOPs) 2 Statements of Financial Accounting Standards (SFASs) 3 Interpretations 4 Technical bulletins 5 Statements of Financial Accounting Concepts... www.nyse.com The contents of the financial markets/stock exchange sites vary and are expanding SUMMARY This chapter has reviewed the development of generally accepted accounting principles (GAAP) and the traditional assumptions of the accounting model You need a broad understanding of GAAP and the traditional assumptions to reasonably understand financial reports The financial reports can be no better . to Financial Reporting Chapter 1 Introduction to Financial Reporting 9 Industry Audit Guides and Industry Accounting Guides are designed to assist auditors in examining and reporting on financial. CT: Financial Accounting Standards Board, 1980). 6 Introduction to Financial Reporting Chapter 1 Introduction to Financial Reporting 7 The hierarchy includes two constraints. To be useful and. FASB Electors Board of Trustees Financial Accounting Foundation (FAF) Financial Accounting Standards Advisory Council (FASAC) Financial Accounting Standards Board (FASB) Advice Appoint Govern Appoint and fund Appoint and