[...]... ',1'-'t.*.tt*t",+',+- fT$Jif',f':$ 12 CHAPTER o BUSI NESS: HAT' 5 lT ALL ABOU T ? 1 W Generallyaccepted accounting principles(GAAP) are the guidelines for financialreporting The Financial Accounting StandardsBoard (FASB) the is group that setsaccounting standards gets its authority lt from the SEC The PublicCompany Accounting Oversight Board (PCAOB) a group formed to is oversee the auditing profession and the... Setsthe Guidelines for Financial Reporting? The U.S Congress established the Securities and Exchange Commission(SEC) in 1934 Auditing standardsare set by the Public Company Oversight Board (PCAOB), and accounting standards(GAAP) are set by the Financial Accounting Standards Board GASB) Public Company Accounting Oversight Board (PCAOB) In response to the 2001-2002 discovery of accounting scandals, the... opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in co4iunction with the related financial statements These financial statements and financial statement schedule are the responsibility of the Company's management Our responsibility is to express an opinion on these financial statements and financial. .. and maintainers of financial information, it makes sensethat they have expandedtheir role as the keepersof businessinformation systemsto include more than financial information The cost of obtaining businessinformation has decreased rapidly in the past few years.The financial accounting information a company reports is now just a part of the total available businessinformation The accounting information... Liabilities + Shareholders'Equity Balance Sheet TheAccounting Equation + Retained This shows how the accounting equationlorms the foundation for the statements The books are a company's accountingrecords Earnings Statement of Changes in Shareholders'Equity Using the accounting equation to keep track of the transactionsof a businessis a useful way to see how the financial statementsare put together.Exhibit... statementsare related to the basic accounting equation The actual way a company keeps track of its financial transactionsand its records-commonly called its books-can vary from a simple manual record-keepingsystem to a complex computerized system.No matter how a company keeps its records, the financial statementswill look the same.The accounting equationis the basisfor accumulatingaccountinginformation and... company's major accountingpolicies and provide other disclosures required by the accounting standardsand the SEC Accompanying every public company's annual financial statementsis an audit opinion Exhibit 1.17 shows the audit opinion from the most recent financial statementsof Dell Corporation Read it and think about whether or not it makesyou feel confident in the reliability of the financial statements... nanceand he did not know accounting. His conviction and long prison sentence us that in businessmust know somethingabout accounting Everyone this is no longer acceptable Do you think accounting is important? Anyone who has a television or reads a newspaper is reminded almost every day of the importance of accounting. Now more than ever, it is crucial for people in businessto understandbasic accounting. In this... CHAPTER BUSI NESS: HAT, SI T ALL AB O U T ? 1 W Notes to the financial statements are information providedwith the four basic statementsthat describes the company's major accounting policies and provideother disclosures helo external to usersbetter understand the financialstatements includes thesefour basic statementsas well as A company's set of financial statements an important section called notes to... are an integral part of the set of financial statements The notes describe the company's major accounting policies and provide other disclosures to help As external usersbetter understandthe financial statements you learn about the four statements,rememberthat you will be able to frnd additional information about eachin the notes In this chapter,we will look at each financial statementbriefly Later chapterswill . class="bi x0 y0 w1 h1" alt="" Color-Coded Accounting Equation This color-coded accounting equation is a tool you will use throughout your financial accounting course. Fully explained in Chapter. Deferrals 64 AccrualBasisAccounting 64 Cash BasisVersusAccrual BasisAccounting 65 Accounting Periods and Cutoff lssues 65 How lnvestors-Owners and Creditors-Use Accrual Accounting Information. Cash Flows 427 Chapter 10 Using Financial Statement Analysis to Evaluate Firm Performance 475 Appendix A: Staples Financial Reports 541 Appendix B: The Mechanics of an Accounting System 575 Glossary