ENGL 112 Lecture Notes - Lecture 4: Cash Flow Statement, International Financial Reporting Standards, Financial Statement
Document Summary
Financial accounting is a specialized branch of accounting that keeps track of a company"s financial transactions. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet. Gaap is a set of guidelines that allow users to understand how the statements were made and thus increases dramatically their usefulness and clarifies their limitations. If financial accounting is going to be useful, a company"s reports need to be credible, easy to understand, and comparable to those of other companies. To this end, financial accounting follows a set of common rules known as accounting standards or generally accepted accounting principles (gaap) Weak internal controls - lack of supervision, lack of documentation, poor. Pressure - market, investors demand good results; company will do anything systems to secure financing. The accounting equation: assets liabilities = shareholders" equity.
