companies CFO, Terry Reed, has decided to book the 1.2 million in sales regardless of the laws and requirements provided by GAAP, SOX, and The AICPA Professional Code of Conduct. If Terry Reed does not comply with all laws and requirements of these accounting authorities, the company could face large enough penalties that will shut down the business for good such as Enron and WorldCom. 2001 marks a big year for corporate fraud which in turn forced the birth of the Sarbanes-Oxley Act of 2002 (SOX). The
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Harmonization of Accounting Standards Week 2: Harmonization of Accounting Standards - You Decide Dear Mr. Herb, Our Company is facing the issue of whether to adopt IFRS or continue reporting under domestic GAAP. Before making the final decision we need to review and discuss the pros and cons of such a transition. “The use IFRS as a universal financial reporting language is gaining momentum across the globe. Adopting IFRS is going to be very challenging but at the same time could also be
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Basic Accounting Concepts and Business Structures Chris Walters ACC 537 May 9, 2011 James T Neuner Basic Accounting Concepts and Business Structures Sources of GAAP and Hierarchy The main sources of GAAP fall into four main categories; A, B, C, and D, with category A as the most authoritative, then B, C, and the least authoritative being D. Category A includes FASB Standards, Interpretations, and Staff Positions, APB Opinions, and AICPA Accounting Research Bulletin Category B contains
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Accounting period: the annual reporting period (or fiscal year) Accounting priciples: are fundamentals theories, truths and propositions that serve as the foundation for financial accounting and reporting Accounting standards: establish the authoritative guidance on how companies should account for and report specific transactions events and arrangments in their financial statements Accrual accounting: measures the reports and economic effect of a companies transactions evente etc in the periods
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RUNNING HEAD: ACCOUNTING PRACTICES AND ENTRIES PAPER Cheryl Abdur-Rahman Accounting Practices and Entries Prof: Agnes Samaniego February 13, 2010 Accounting practices and principles are at the heart of financial management (McLean, 2003). Every organization needs to have a viable accounting system in place. It is up to the organization to find the course of financial action that maximizes the well –being of the organization (McLean, 2003). Accrual
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Unit 1 Introduction to Financial Accounting Learning Outcome After reading this unit, you will be able to: • Explain succinctly financial accounting concepts • Elucidate on different principles of financial accounting • Explicate the importance and scope of financial accounting • Understand Generally Accepted Accounting Principles(GAAP) • Identify limitations of Financial Accounting Time Required to Complete the unit 1. 2. 1st Reading: It will need 3 Hrs for reading a unit 2nd Reading
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In case situation 1, the change in the accounting estimate is used due to changes being made for future benefits. Under the current GAAP “Generally Accepted Accounting Principle” SFAS No. 154, the change in accounting estimate is reported as the following: a. Applied to the period of change and future periods only. b. Amounts reported for periods will not be restated or retrospectively adjusted. Depending on the method the company chooses to use will determine how the change is computed. If using
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Explaining Basic Accounting Concepts and Business Structures ACT/537 January 9, 2012 Explaining Basic Accounting Concepts and Business Structures A solid understanding of basic accounting is arguably one of the most essential skills future businesses leaders require for success. The business world operates to make a profit, and in order to do so, managers must understand the numbers. Managers from marketing, production, management, or information systems should each understand fundamentals
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A. Accounting Assumptions= Assumption#1. Accounting Entity-A company is considered a separate “living” enterprise, apart from its owners. In other words, a corporation is a “fictional” being: / It has a name. / It has a birthdate and birthplace (referred to as incorporation date and place, respectively). / It is engaged in clearly defined activities. / It regularly reports its financial health (through financial reports) to the general public. / It pays taxes. / It can file lawsuits. Why Assume “Accounting
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have a code of ethics to ensure that all departments are doing what is expected of them and also that those in the finance department are following the highest standards of financial and ethical standards. The Four Elements of Financial Accounting are Planning, Controlling, Organizing and directing, and Decision making. Planning is when the financial manager identifies the steps that
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