Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Business Activities
Supply of Accounting
Information
Primary SEC filing requirements:
Form 10-K: annual
Form 10-Q: quarterly
Benefits of disclosure.
Lower costs of funds and labor
Economic benefits form reliable
disclosures
Costs of disclosure.
Preparation and dissemination,
competitive disadvantages, litigation
potential, and political costs
Financial Statements
Walgree
ns
Investing Activities
Financing Activities
Income Statement
An income statement reports on
operating activities.
It lists amounts for sales (and
revenues) less all expenses (and costs)
over a period of time.
Sales less expenses yield the bottomline net income amount.
Berkshire Hathaways
Income Statement
Walgreens
Statement of Equity
The statement of equity reports on
changes in the accounts that makeup
equity
Contributed capital
Earned capital (retained earnings and
accumulated other comprehensive income)
Other (typically accumulated other
comprehensive income and minority or
noncontrolling interest).
Berkshire Hathaways
Statement of Stockholders Equity
Walgree
ns
Walgree
ns
Profitability Analysis
Competitive Analysis
Industry competition
Bargaining power of buyers
Bargaining power of suppliers
Threat of substitution
Threat of entry
Oversight of Financial
Accounting
oversees all publicly traded
SEC
companies
Financial Accounting Standards Board
(FASB)
Public Company Accounting Oversight
Board (PCAOB)
Audit Report
Financial statements are managements responsibility.
Auditor responsibility is to express an opinion on those
statements.
Auditing involves a sampling of transactions, not
investigation of each transaction.
Audit opinion provides reasonable assurance that the
statements are free of material misstatements, not a
guarantee.
Auditors review accounting policies used by
management and the estimates used in preparing the
statements.
Financial statements present fairly, in all material
respects a companys financial condition, in
conformity with GAAP.
Sarbanes-Oxley Act
The SEC requires the CEO and CFO of a company
to personally sign a statement attesting to the
accuracy and completeness of the companys
financial statements.
The statements signed by both the CEO and
CFO contain the following commitments:
Both the CEO and CFO have personally reviewed the
annual report.
There are no untrue statements of a material fact that
would make the statements misleading.
Financial statements fairly present in all material
respects the financial condition of the company.
All material facts are disclosed to the companys
auditors and board of directors.
No changes to its system of internal controls are made
unless properly communicated.
Financial Accounting:
not an exact science
GAAP allows companies choices in
preparing financial statements
(inventories, property, and
equipment).
Companies must choose among the
alternatives that are acceptable under
GAAP.
Financial statements also depend on
countless estimates.