Term
| Financial statement is demanded because |
|
Definition
| of its value as a source of information about company performance, financial condition, and stewardship of resources. |
|
|
Term
| The supply of financial information is guided by |
|
Definition
| the costs of producing and disseminating it and the benefits it will provide to the company |
|
|
Term
| Voluntary disclosure benefits |
|
Definition
• Low cost access to capital.
• Avoid the “ lemons” problem.
|
|
|
Term
| Voluntary disclosure costs |
|
Definition
• Information production.
• Competitive disadvantage.
• Litigation exposure.
• Political exposure.
|
|
|
Term
| Analysts need three types of financial information |
|
Definition
1.Quarterly and annual financial statements along with nonfinancial operating and performance data.
2.Management’s discussion and analysis (MD&A) of financial and nonfinancial data—key trends and changes.
3.Information useful for identifying the future opportunities and risks confronting each of the company’s businesses and for evaluating management’s plans for the future.
|
|
|
Term
| What are the keys to deciding whether info is useful? |
|
Definition
- Relevance-capable of aiding in decision
- Timeliness
- Predictive Value
- Feedback Value-confirms or alters a previous expectation
- Reliability
- Verifiability
- Representational Faithfulness- is it truly what is going on?
- Neutrality
- Comparability
- Consistency
|
|
|
Term
wGAAP comes from two main sources:
|
|
Definition
1.Accounting practices that have evolved over time.
●
2.Written pronouncements by designated organizations like the FASB or IASB
|
|
|
Term
| Who sets auditing standards? |
|
Definition
| Public Companies Accounting Oversight Board (PCAOB) |
|
|
