Financial Accounting &

Accounting Standards
 1. The major Financial statement &
other means of Financial reporting:-

 Essential  Frequently provided

financial statements
characteristics:
1. balance sheet
I. Identification,
measurement, 2. income statement
communication 3. cash flow statement
II. 2) economic ethics 4. owners equity statement.
III. 3) interested parties

Some statements are provided by means of financial

reporting other than financial statements. There are some
reasons why companies provides such information.
2. Accounting assists in the efficient
use of scarce resources:-

We know resources are limited. As a result, people try to conserve them and
ensure that they are used effectively.

Accounting provides:-
 Reliable, relevant and timely information to managers investors.
 Also provide measurement of efficiency and financial soundness.
How this process of capital allocation works are
given below:

Financial Reporting Users Capital Allocation

The financial information a Investors and creditors The process of determining
company provides to help use financial reports to how and what cost money
with capital allocation about make their capital is allocated among
the company. allocation. competing interests.
3. The objective of Financial
reporting:-

 To provide useful information

 To know cash flow
 Financial reporting
 To Help
4. The need for Accounting
Standards:-

The accounting profession has attempted to develop a set of standards

that is generally accepted and universally practiced.

 To develop its own standards

 To Command the greatest possibility
 To prepare statements
5.The major policy-setting bodies & their
role in the standard setting process:-

The Securities and Exchange Commission

(SEC)

3 organizations The American Institute of Certified Public

Accountants
(AICPA)

The Financial Accounting Standards Board

(FASB)
6.Explain The meaning of generally
accepted accounting principles(GAAP):

 Generally accepted accounting principles(GAAP) are those

principles that have substantial authoritative support , such as:

 FASB Standards
 Interpretations
 Staff positions
 APB Opinions and interpretations
 AICPA Accounting Research Bulletins, and
 others authoritative Pronouncements
7. The impact of user groups on the
rule making process:-
User groups may want particular economic events
accounted for reported in a particular way.
 Influencing changes
 Increasing complexity
 Political action
 Empirical findings
8. The challenges facing financial
reporting:-

 Financial reports fail to Provide:-

 Forward looking information

 Some key performance
 Sufficient information about soft assets
 Real time financial information
9.Ethics & Financial Reporting:-

The issues in Accounting Ethics:-

 Fraudulent Financial Reporting
 Misappropriation of Assets
 Disclosure

Accounting Code of Conducts

Summary:-
1. The major Financial statement & other means of
Financial reporting
2. Accounting assists in the efficient use of scarce
resources
3. The objective of Financial reporting
4.The need for Accounting Standards
5.The major policy-setting bodies & their role in the
standard setting process
6.Explain The meaning of generally accepted accounting
principles(GAAP)
7. The impact of user groups on the rule making process
8. The challenges facing financial reporting
9.Ethics & Financial Reporting
Thank you
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