Intro to accounting Flashcards
What is accounting
- a system of dealing with financial information that is communicated to users
- two types: external and internal users
examples of external users
- creditors
- investors
- bank
- financial institution
- researchers
- government
- external auditor
what is a bank
a type of financial institution
what is an external auditor
a person who comes to the company to verify/check the financial information is correct and sign off based on their opinion
what is auditing
process of being an auditor
examples of internal users
- owner of company
- internal auditor
- CFO
- manager
what does an internal auditor do
makes sure no fraud is reported to the investors
what is the CFO
chief financial officer
what are the functions of accounting
- recording transactions
- summarize transactions into financial reports
- interpret the reports
- analyze data with numbers
what are transactions
an event where something of value is exchanged for another thing of value
what is booking keeping
- records transactions and summarizes financial reports
what is an accountant
- the job of accounting
how to become a accountant
- need to be designated
- to be designated you need to pursue an education after 4 years of uni/collage
- if you were a business major you don’t need to start from the beginning of the courses
- if you majored in something different you need to learn from the start
what is CPA stand for
- chartered professional accountant
- in USA it is called chartered public accountant
What was CPA before 2012
- CGA (certified general accountant)
- CMA (certified management accountant)
- CA (chartered accountant)
what are the 4 major accounting firms
- Price Waterhouse cooper (PWC)
- Ernest & Young (EY)
- KPMG
4 Deloitle & Touche
what are accounting firms
offers accounting services worldwide
what does the CPA institution do
- admisiter titles or qualified candidates
- make sure accountant name stays in the system by doing a certain amount of hours every year
- develop standards and rules
- makes a file of the qualified people
what was CPA institution before 2011
- GAAP (generally accepted accounting principals)
- every country has there own GAAP
After 2011 what standards were made
- IFRS
- IASB
- ASPE
- ACSB
what does IFRS stand for and when is it used
- international financial reporting system
- if a company is publicly traded
- need to disclose all information
what does IASB stand for and what does it do
- international accounting standard board
- writes rules for IFRS
what does ASPE stand for and when is it used
- accounting standards for private enterprise
- small/ private companies
what does ACSB stand for and what does it do
- accounting Canadian standard board
- writes rules for ASPE
