Page 408 - Introduction to Business

382 PART 4 Accounting

EXHIBIT 11.1
External Users of Accounting Information

External User Information Required or Expected

Government units The IRS, for example, requires an annual tax return.
Lenders Financial statement information, specifically information
concerning the firm’s ability to meet financial obligations.
Suppliers Financial statement information, specifically information
regarding ability to pay back purchases made on credit.
Also, the supplier will receive financial documents from
the firm.
Credit-rating Similar to information required by lenders and vendors.
agencies Lenders and suppliers often purchase the credit-
worthiness assessments made by credit-rating agencies.
Investors Financial statements as well as personal information
regarding stock and dividend transactions.
Customers Billing statements, sales invoices, amounts owed,
account status, date due, and product information.
Employees Individuals expect payment of wages and specific payroll
information, such as payroll deductions for social security,
insurance, etc. Employee groups, such as labor unions,
may want aggregate information such as profits, payroll
expenses, and pension funding and liability.

EXHIBIT 11.2
Authoritative Accounting Literature

Highest Level of Accounting Authority

Nonsuperseded sections of the Accounting Research Bulletins issued by
Committee on Accounting Procedures
Nonsuperseded sections of the APB Opinions issued by the Accounting
Principles Board
Statements of Financial Accounting Standards issued by the FASB
Interpretations issued by the FASB
Statements and Interpretations of the Governmental Accounting Standards
Board for government units

Next Level of Accounting Authority

AICPA Industry Accounting Guides
AICPA Statements of Position
FASB and GASB technical bulletins
Industry accounting practices
AICPA Accounting Interpretations

Lower Level of Accounting Authority

Guidelines published by SEC and other regulatory agencies
FASB and GASB Concept Statements
APB Statements
AICPA Issues Papers
Minutes of the FASB Emerging Issues Task Force
Other professional association statements
Accounting textbooks, reference books, and articles written by recognized
authorities in the field

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