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The Basis for Business DecisionsThe Basis for Business Decisions

Fifteenth Edition

Williams Haka Bettner Carcello

Copyright 2010 by The McGraw-Hill Companies, Inc. AllMcGraw-Hill/Irwin

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Accounting:Accounting:

Information for Decision MakingInformation for Decision Making

Chapter 1

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AccountingInformation

The

Accounting

Process

Decision

Makers

Economic

Activities

Actions

(decisions)

Accounting links

decision makers

with economicactivitiesandwith the results of

their decisions.

Reported

Results of

Actions

(decisions)

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Types of AccountingTypes of Accounting

InformationInformation

Financial

Management

Tax

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Basic Functions of anBasic Functions of an

Accounting SystemAccounting System

Summarize

and

communicate

information to

decision

makers.

Classify

similar

transactions

into usefulreports.

Interpret

and record

business

transactions.

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Components of InternalComponents of Internal

ControlControl

Control

Environment

Risk

Assessment

Control

Activities

Information andCommunication

Monitoring

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External Users ofExternal Users of

Accounting InformationAccounting InformationOwnersCreditorsPotential investors

Labor unionsGovernmental agenciesSuppliersCustomers

Trade associationsGeneral public

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Ch i i fCh t i ti f

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Characteristics ofCharacteristics of

Externally ReportedExternally Reported

InformationInformationA Means to anEnd

A Means to an

End

Broader than

Financial

Statements

Broader than

Financial

Statements

Historical in

Nature

Historical in

Nature

Results from Inexact and

Approximate Measures

Results from Inexact and

Approximate Measures

Based on General-

PurposeAssumption

Based on General-

PurposeAssumption

Usefulness

Enhanced via

Explanation

Usefulness

Enhanced via

Explanation

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Careers in AccountingCareers in Accounting

Public Accounting

Management Accounting

Governmental AccountingAccounting Education

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Ethics, Fraud & CorporateEthics, Fraud & Corporate

GovernanceGovernance

Corporate governance entails corporate

structures and processes for overseeing

the companys affairs to ensure that the

company is being managed with the best

interests of shareholders in mind.

Dennis Kozlowski, the former CEOof Tyco, was sentenced to 8 1/3 to

25 years in prison for his

conviction for conspiracy,

securities fraud, and falsifying

records.

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End of Chapter 1End of Chapter 1

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