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What federal legislation was aimed at upgrading accounting practices in publicly traded private companies to protect investors?
Wiki User
∙ 11y ago
The Sarbanes- Oxley ACT
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Difference between auditing and accounting?
Accounting is the process of recording, classifying and summarizing of the business events for the purpose of providing financial information to investors for decision making. Auditing is determining whether recorded information properly to the business events that occurred during the accounting period. Its main duties are observe, valuate and recommend the financial statement and the firm.
What is positive accounting theories?
Positive Accounting Theory is a branch of academic accounting research. It tries to predict and explain actual accounting practices. It is used to understand how to use accounting practices better.
What is accounting convection?
Accounting conventions are the rules and regulations which are required to be followed by the accountants while they maintain the accounts of transactions of companies. The accounting conventions are followed from many years back and they are changed only if the need arises. Due to the changing ways of businesses and more competitive environment, the accounting conventions can be changed slightly for increasing the efficiency of the accounting practices.
What is the relation between accounting theory and accounting practices?
Accounting theory examines practical and theoretical issues in accounting practices such as historical costs, decision usefulness, portfolio risk, fair-value-oriented standards and executive management compensation and earnings. In addition, it also discusses economic and political issues and criteria related to accounting practices required by accounting governing bodies such as Canadian Institute of Chartered Accountant (CICA), Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB). The first goal of accounting theory is to describe and explore various theories that underlie financial accounting and reporting. The second goal is to explain and illustrate the relevance of these theories in order to understand the practice of accounting and reporting. Some of the main theories are based on economics and finance. For instance, by discounting future cash flows to present time, the present value model enables a theoretically correct basis of asset and liability valuation and income measurement of a firm. Thus, the present value model provides a benchmark to guide accounting practice. From a finance stand point, portfolio and efficient market theory are used in accounting practices in understanding how investors make rational investment decisions and how they use financial accounting information to make their decisions. Accountants can then prepare financial statements that are of greatest use to investors. To put in a nutshell, accounting theory helps to understand the impact of complex ideas and regulations on financial reporting and the interpretation of information generated by financial reporting at the conceptual level.
Why do accounting systems of different countries differ?
Accounting systems of different countries differ because accounting is shaped by the environment in which it operates. Each country's accounting system has evolved in response to the local demands for accounting information. Because of globalization of capital markets, the lack of comparability has become a problem as transnational financing and transnational investments have grown rapidly in recent decades. Due to the lack of comparability, a firm may have to explain to investors why its financial position looks very different on financial reports that are based on different accounting practices.
What is the SEC and how is it involved with accounting standard setting?
The SEC stand for Security Exchange Commission is a federal agency that enforces the federal securities laws. The SEC also requires certain companies like publicly owned companies follow a certain accounting guidelines called Generally Accepted Accounting Principles or GAAP. This guidelines defines what kind of accounting public companies shall use and it defines fair accounting practices. The SEC work hand in hand with the Financial Accounting Standard Board to update laws and accounting practices. They also set new laws to ensure the fairness of accounting practicing.
How non users can benefit from accounting Practices?
Accounting practices. are the set of activities done by accountants in the field of financial accounting. They are what accountants do, these include recording transactions, Classifying transactions, summarizing transactions, reporting transactions and interpreting reports. The posting of transactions from the source documents to the preparation of income and financial statements takes the large fraction of what accountants do.Users of Accounting Practices. The accountants, financial managers, petty cashiers, auditors, accounting intellectuals, and other related individuals who are knowledgeable and have accounting expertise (i.e qualified accounting personnel) are said to be the users of Accounting Practices.Non-users of Accounting Practices. The group of individuals who wait for the outcomes/results of the Accounting Practices are said to be non-users of accounting practices. Because they lack accounting knowledge, skills and expertise, they are not in a good position to do what accountants do. This means they can not practice and cant be involved in the process of recording transactions, Classifying transactions, summarizing transactions, preparing income and financial statements, reporting transactions, sometimes they might lack the competence to interpret the given financial reports, unless assisted by the qualified accounting personnel.Non-user of accounting Practices include: Customers, general public, potential investors and shareholders without accounting skills.How do they benefit from accounting practices? Accounting information is the outcome of accounting practices, what qualified accounting personnel do ( accounting practices) provide information to enable them make decisions.Costomers. They need accounting information to be able to rely and establish a confidence in the firm they purchase, otherwise they may decide to sacrifice the firm and start a new tie with another company if they observe poor performance in the accounting information at hand.General public. They need the accounting information for social economic needs like employment opportunities, environmental and legal consideration and lawful dealings of the firm. The general public has the obligation of maintaining justice, fair play and balance in respect of the firm in their area.Potential/ present investors and shareholders without accounting expertise. They need accounting information to be able make decisions like, sacrificing more fund for investment into the firm, if it is performing better or withdraw their fund if the firm is performing poor. A good performing company is said to attract new investors and shareholders. The performance of the firm is measured by the financial accounting reports (information) given after the financial accounting practices.
Difference between auditing and accounting?
Accounting is the process of recording, classifying and summarizing of the business events for the purpose of providing financial information to investors for decision making. Auditing is determining whether recorded information properly to the business events that occurred during the accounting period. Its main duties are observe, valuate and recommend the financial statement and the firm.
When do you get paid after you file a workers comp claim?
That will depend on the accounting practices of individual companies. You need to ask the company itself.
What is positive accounting theories?
Positive Accounting Theory is a branch of academic accounting research. It tries to predict and explain actual accounting practices. It is used to understand how to use accounting practices better.
Where can one find accounting practices for sale?
Accounting practices are not for sale, as then they would be of no use to customers. What is for sale are books on accounting practices. These can be found at Amazon, Waterstones and all good book retailers.
What is the regulatory bodies in accounting?
The regulatory bodies that govern accounting practices are Securities and Exchange Commission, the American Institute of Certified Public Accountants, the Financial Accounting Standards Board and the Governmental Accounting Standards Board. These regulatory bodies make sure companies file their accounting statements correctly.
What is accounting convection?
Accounting conventions are the rules and regulations which are required to be followed by the accountants while they maintain the accounts of transactions of companies. The accounting conventions are followed from many years back and they are changed only if the need arises. Due to the changing ways of businesses and more competitive environment, the accounting conventions can be changed slightly for increasing the efficiency of the accounting practices.
To whom did the SEC delegate authority to prescribe accounting practices in the late 30s?
In 1938, the SEC delegated much of its authority to prescribe accounting practices to the AIA and its Committee on Accounting Procedures (CAP).
What best describes how investors behave when engaged in socially responsible investing?
Investors engaged in socially responsible investing consider both financial returns and positive social or environmental impact when making investment decisions. They aim to align their investments with their values by supporting companies with good social and environmental practices. This approach demonstrates a commitment to sustainability and responsible business practices.
What is the relation between accounting theory and accounting practices?
Accounting theory examines practical and theoretical issues in accounting practices such as historical costs, decision usefulness, portfolio risk, fair-value-oriented standards and executive management compensation and earnings. In addition, it also discusses economic and political issues and criteria related to accounting practices required by accounting governing bodies such as Canadian Institute of Chartered Accountant (CICA), Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB). The first goal of accounting theory is to describe and explore various theories that underlie financial accounting and reporting. The second goal is to explain and illustrate the relevance of these theories in order to understand the practice of accounting and reporting. Some of the main theories are based on economics and finance. For instance, by discounting future cash flows to present time, the present value model enables a theoretically correct basis of asset and liability valuation and income measurement of a firm. Thus, the present value model provides a benchmark to guide accounting practice. From a finance stand point, portfolio and efficient market theory are used in accounting practices in understanding how investors make rational investment decisions and how they use financial accounting information to make their decisions. Accountants can then prepare financial statements that are of greatest use to investors. To put in a nutshell, accounting theory helps to understand the impact of complex ideas and regulations on financial reporting and the interpretation of information generated by financial reporting at the conceptual level.
Which of the following statements best describes how investors behave when engaged in socially responsible investing?
They invest in companies with a business model and social mission that they support
