rsm100

Topics: Balance sheet, Generally Accepted Accounting Principles, Income statement Pages: 10 (2110 words) Published: October 15, 2014
Chapter 15 Understanding accounting and Financial statement

Accounting is the process of measuring, interpreting, and communicating financial information to support internal and external business decision.

Users of accounting information
Both people inside an organization and people outside an organization use accounting information to help them make business decision.

Owners, shareholders, potential investors, creditors use to evaluate operation of the firm to make investment decision.

Management use to plan and control

Employees, union officials use to use in contract negotiations.

Lenders, suppliers use to evaluate credit rating

Government agencies, economic planners, consumer groups use to evaluate tax liabilities to approve new issues of stocks and bonds.

The major users of accounting information are managers at a business, government agency, or not-for-profit organization. Accounting information helps them to plan and control daily and long-range operation.

Business owners and board of directors at not-for-profit groups also use accounting data to track managers’ process in operating the organizations.

Companies share sensitive financial information with their employees and teach them how to understand and use financial statements. People who support open-book management believe their work contributes to the company success, which, in return, benefits the employees.

Outside a firm: potential investors evaluate accounting information to help them decide whether to buy a firm’s stock.

Bankers and other leaders use accounting information to evaluate a potential borrower’s finical soundness. Eg: Canada Revenue Agency (CRA) and provincial tax officials use it to calculate a company’s tax liability责任. Citizen’s groups and government agencies use accounting information to access the efficiency.

Eg: Volunteer Income Tax Program (CVITP), organized by the CRA, 16000 volunteers help more than half million Canadians to complete their provincial and federal tax return.

BUSSINESS ACTIVITIES INVOLVING ACCOUNTING
The natural progression of a business begins with financing, The 3 basic steps are financing, investing and operating
1. Financing activities provide necessary funds to start a business and expand it after it begins operating. 2. Investing activities provide valuable assets that are needed to run a business. 3. Operating activities focus in selling goods and services, but they also view expenses as important elements of sound financial management.

Accounting Professionals
Accounting professionals can be classified as public accounts, management accountants, government accountants, and not-for-profit accounts.

Public accountants: an account who provides accounting services to other organizations, individuals or business firm for a fee.

3 basic services of public accountants:
1) Auditing审计, or examining, financial records
2) Tax preparation, planning, and related services
3) Management consulting咨询

4 largest public accounting firms – Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers Problems: some years ago, public accounting firms providing the same management consulting services to the same firm they auditing – a conflict of interest is created.

More and more public accounts are also being certified证明 as forensic 法院的accountants. These professionals, and the firms that employ them, focus on uncovering potential fraud诡计 in many different organization.

Chartered Accountants (CAs)
Certified Management Accountants (CMA)
Certified General Accountants (CGA)
Certified Fraud Examiner (CFE)
Certified Internal Auditor (CIA)
加拿大是一个会计体系非常成熟和发达的国家,光是国际认可的会计师执业资格证书就有CA(特许会计师)、CGA(注册会计师)、CMA(注册管理会计师)三种之多。   特许会计师(CA)证书
  加拿大特许会计师(Chartered Accountants,简称CA)证书是由加拿大会计和审计行业公认的权威行业证书,由加拿大特许会计师协会(The Canadian Institute of Chartered Accountants,简称CICA)制定和实施考核标准。特许会计师多为上市公司进行审计。第二种证书是注册会计师(CGA)证书,加拿大注册会计师(Certified General...
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