MGT220H5 Chapter Notes - Chapter 1-6: Earnings Before Interest And Taxes, Cash Flow Statement, Measurement Uncertainty
Document Summary
Accounting is: identification, measurement and communication of financial information about economic entities to interested persons. Managerial accounting: process of identifying, measuring, analyzing and communicating financial information to internal decision makers. Unreliable irrelevant information leads to poor capital allocation. Stakeholders: parties who have something at risk in the financial reporting environment , such as they salary, job, investment or reputation: users: anyone who prepares, relies on, reviews, audits or monitors financial information. Good for borrowers because it makes funds more accessible. Good for lenders because they are able to get their cash out of the mortgage assets. It is good for spe"s as they can earn interest on the pool of assets. Good for investors as they can earn return on their investment: subprime lending went wrong because: Brokers lent money aggressively in hopes of higher profits to borrowers who may not have been credit worthy.
