external users of accounting information - ✔✔Investors, creditors,
employees, labor unions, customers, suppliers, government regulatory
agencies, financial intermediaries
financial accounting - ✔✔Provides relevant financial information to various
external users.
managerial accounting - ✔✔deals with the concepts and methods used to
provide information to an organization's internal users
GAAP - ✔✔set of both broad and specific guidelines that companies should
follow when measuring and reporting the information in their financial
statements and related notes
SEC - ✔✔responsible for setting accounting and reporting standards for
companies whose securities are publicly traded
FASB - ✔✔the current private sector body that has been delegated the task
of setting accounting standards.
, IASB - ✔✔objectives are to develop a single set of high-quality
understandable global accounting standards, to promote the use of those
standards, and to bring about the convergence of national accounting
standards and international accounting standards
IFRS - ✔✔developed by the IASB and used by more than 100 countries
SOX - ✔✔law provides for the regulation of the key players in the financial
reporting process
Initial market transactions - ✔✔involves issuance of stocks and bonds by
the corporation
Secondary market transactions - ✔✔involves the transfer of stocks and
bonds between individuals and institutions
Maltec Corporation has started placing its quarterly financial statements on
its web page, thereby reducing by 10 days the time to get information to
investors and creditors. The qualitative concept improved is: -
✔✔Timeliness
Timeliness - ✔✔information that is available to users early enough to allow
its use in the decision process
Consistency - ✔✔permits valid comparisons between different periods
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