Page 463 - Introduction to Business

CHAPTER 12 Financial Reporting 437

2. Use a Web search tool and investigate auditing. List Its mission is to provide members with the
and briefly describe some websites that concern resources, information, and leadership that enable
auditing. them to provide valuable services in the highest
3. The American Institute of Certified Public professional manner to benefit the public as well
Accountants (AICPA) is the premier national as employers and clients. Go to the AICPA website
professional association for accountants in the (http://www.aicpa.org). What are the requirements
United States. The AICPA and its predecessors have for becoming a Certified Public Accountant (CPA)?
been serving the accounting profession since 1887. What are the different sections on the CPA exam?

Portfolio Projects

Exploring Your Own Case in Point Starting Your Own Business
In this chapter we describe the purpose of financial After reading this chapter, you should be able to make
reporting and present the four financial statements. some plans regarding your startup company’s financial
Answering these questions will help you better statements.
understand the role of financial reporting by your 1. What financial statements does your company
company. need to prepare? Regarding the balance sheet, what
1. Go to your company’s website and locate the sorts of assets would your company need? What
financial reports. What was the amount of your sorts of liabilities would your company incur?
company’s total assets for the most current year? Prepare a proposed starting balance sheet for your
What was the amount of your company’s profit company based on this information.
(net income) for the most current year? 2. Regarding the income statement, what sort of
2. On the auditor’s report, find the name of the audit revenues would you expect your company to
firm that audited your company’s financial generate in its first year of operations? What sort
statements. Did the auditor’s report indicate of expenses would you expect to incur? Prepare
whether the auditor followed generally accepted a forecasted income statement for your
auditing standards? In the auditor’s report, does company’s first year of operations based on this
the audit opinion state whether your company was information.
in compliance with generally accepted accounting 3. The chapter describes notable advances in
principles? information technology and how they affect
3. Is your company engaged in international trade? accounting. How would you use current
Do the financial statements indicate a foreign information technology in your company,
exchange gain or loss? If so, how much was it? particularly with regard to the accounting system?

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