Why do we call accounting “the language of business”? Hint: Think in terms of the purpose of accounting.
What does Generally Accepted Accounting Principles (GAAP) mean?
What represents the results of the accounting process that are summarized in periodic reports?
If you were a business owner, what would be your choice of business entity?
1. What is the primary ethical issue in this case?
2. Gather all the facts. Specify the relevant facts, disagreement, and other conflicts situations.
3. Identify the stakeholders and their obligations. Identify and consider all of the people affected by a decision – the stakeholders.
4. Identify the relevant accounting ethics standards involved in the situation. Identify the most ethical values of the accounting profession that should be considered in evaluating the facts and alternative courses of action.
5. Identify the operational issues
6. Identify the accounting and auditing issues.
7. List all the possible alternatives that you can or cannot do.
8. Compare and weigh the alternatives. Is it legal ( in conformity with Laws PCAOB rules)? is it consistent with professional standards AICPA principles, IMA ethics standards; GAAP, and GAAS? Is it consistent with in-house rules
(firm’s policies and its own code of ethics), is it right?
What are the potential harms and benefits to the stakeholders? is it fair to the stakeholders? Is it consistent with virtue considerations?
9. Decide on a course of action. After evaluating the ethics of the alternatives, select the one that best meets the ethical requirements of the situation.
Reflect on your decision.
: PRINCIPLES OF FINANCIAL
ACCOUNTINGCOURSEGUIDEDuringWeek3,students will improve their critical and analytical thinkingskillsastheyrelateto bothaccountingconceptsandpracticalwaysinwhichbusinessesapplyaccountingconceptswhengeneratingprofitstrategies.
Studentsw illlearn how managers ,investors,and other business stakeholder suseaccountingreports.
Studentswillgainagreaterunderstandingofhowimportanttrendsoreventscanimpactacompany’sfinancialstatements,whichaddvaluableinsightintothefinancialconditionandperformanceofabusiness.
InWeek4,students will learn how managers,investors,and other business stakeholder suseaccountingreports.
Studentswillbeintroducedtotheideathatinvestorscanonlymakesoundinvestmentdecisionswhenpublicaccountantsdisclosemeaningful,timely,andaccurate financialin formation to the public.
After completing
Week4,
students will beable to explain how investor suse the Securities and Exchange Commission’s(SEC)EDGAR data base to research companies’ operations and financial information.
COURSE LEARNING OUTCOMESUpon successful completion of this course, students will be able to
1.Determine the objective(s) of financial reporting.
2.Explain the qualitative characteristics of financial information in investing and lending decision making.
3.Compile financial statements from a given set of economic events under GAAP that take into account the effect of accruals and deferrals.
4.Originate the accounting of reporting cash, receivables, inventory, long-term assets, and liabilities on financial statements.
5.Analyze financial statements to assess a firm’s liquidity, solvency, and profitability.
6.Determine the risk of investing in a company based on the firm’s financial condition, performance, and earnings management
