1. Intermediate I
Chapter 1

3. Define accounting: The process of providing useful financial
Define accounting: The process of providing useful financial information to interested users. (short version)
Learning Objectives
1. ID major financial statements
2. Explain how accounting assists in the allocation of Scarce Resources
3. Describe some of the challenges facing accounting
  a. Non financial measures
b. Forecasting
c. Soft Assets
d. Timeliness
Expectations Gap

4. a. Decision relevant information for parties with reasonable knowledge
Accounting is the Identification
Measurement of Financial Information
Communication
(reporting)
About Economic Entities to Interested Parties
4. Identify the objectives of financial reporting
a. Decision relevant information for parties with reasonable knowledge
b. Project the amount, timing and uncertainty of Cash Flows
c. Identify economic resources and claims against those resources

5. GAAP applies legally to PUBLICALLY TRADED CORPORATIONS
Those corporations whose ownership shares are traded on an organized stock exchange available to the public
Other companies use GAAP as a necessity to borrow money from banks or other financing entities.

6. Discuss the need for accounting standards
Principles based accounting vs. Standards based accounting
Substance Over Form
The economic reality of a transaction should be used to determine how it should be accounted for under GAAP not the form, legal or otherwise, in which it is presented or described.
Integrity

7. How is GAAP enacted Explain the meaning of GAAP
Generally Accepted Accounting Standards
What makes GAAP standards “generally accepted”
  How is GAAP enacted
Due Process:
Research Agenda
Researched
Public Hearings
Discussion Memorandum
More Hearings
Exposure Draft (GAAP Proposal)
Review
Issue [or delay and reconsider]

8. Describe the impact of user groups on standard setting
Political Process
Expectations Gap again
Economic consequences

9. AICPA – American Institute of Certified Public Accountants
Now principally responsible for auditing standards and regulation of professional behavior (Self-reglation)
Auditing Standards Board
Regulation of the profession
Administration and grading of the Uniform CPA exam
Provide Continuing Professional Education in support of continuing mastery of accounting body of knowledge
Provides updates on accounting developments
a. Journal of Accountancy
b. CPA Daily Letter
Online and access for members

10. Alphabet Soup
SEC – Securities Exchange Commission
FAF – Financial Accounting Foundation
FASB – Financial Accounting Standards Board
SOX – Sarbanes Oxley Act
PCAOB – Public Companies Accounting Oversight Board
NASBA – National Association of State Boards of Accountancy
KSBOA - Kansas State Board of Accountancy

11. How does accounting differ from other professions?
Ethics and the Accounting Profession
Pressures:
Maximize bottom line (or manage bottom line)
Challenges of economic competition
Emphasis on short term results in markets   
What are the primary characteristics of a profession?
1. Expertise - Mastery of a Body of Knowledge
2. Legal Monopoly – Licensed by the government/Controlled entry
3. Service in the public interest
4. Self Regulating
How does accounting differ from other professions?

12. Ethics It is not unethical to MAKE MISTAKES
It is not unethical to be stupid/ignorant (unless)
Some things done with appearance of good or with good intentions are in fact unethical
Legal is not always ethical
Evaluate yourself and your intended actions:
Mirror Test
Respect Test
Newspaper Test

14. What’s coming our way!
Pessimist
Optimist