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Lecture Intermediate accounting (16th edition): Chapter 24 - Kieso, Weygandt, Warfield

Chapter 24 - Full disclosure in financial reporting. After studying this chapter, you should be able to: Review the full disclosure principle and describe implementation problems; Explain the use of notes in financial statement preparation; Discuss the disclosure requirements for related-party transactions, subsequent events, and major business segments,. | PREVIEW OF CHAPTER 24 Intermediate Accounting 16th Edition Kieso ● Weygandt ● Warfield Review the full disclosure principle and describe how it is implemented. Discuss the disclosure requirements for related-party transactions, post-balance-sheet events, major business segments, and interim reporting. LEARNING OBJECTIVES Identify the major disclosures in the auditor’s report and understand management’s responsibilities for the financial statements. Identify reporting issues related to financial forecasts and fraudulent financial reporting. After studying this chapter, you should be able to: Full Disclosure in Financial Reporting 24 LO 1 Full disclosure principle calls for financial reporting of any financial facts significant enough to influence the judgment of an informed reader. Financial disasters at Microstrategy, PharMor, WorldCom, and Lehman highlight the difficulty of implementing the full disclosure principle. FULL DISCLOSURE PRINCIPLE LO 1 ILLUSTRATION 24-1 Types of Financial Information LO 1 FULL DISCLOSURE PRINCIPLE Increase in Reporting Requirements Reasons: Complexity of business environment. Necessity for timely information. Accounting as a control and monitoring device. LO 1 FULL DISCLOSURE PRINCIPLE Differential Disclosure “Big GAAP versus Little GAAP”. FASB has traditionally taken the position that there should be one set of GAAP. FASB is working with an advisory committee to explore ways that its standards can be more cost-effective for all companies, regardless of size. LO 1 FULL DISCLOSURE PRINCIPLE Notes are the means of amplifying or explaining the items presented in the main body of the statements. Notes to the Financial Statements Accounting Policies Companies should present a statement identifying the accounting policies adopted and followed. Should present the disclosure as first note or separate Summary of Significant Accounting Policies section preceding the notes to the financial statements. LO 1 Which of the following should be . | PREVIEW OF CHAPTER 24 Intermediate Accounting 16th Edition Kieso ● Weygandt ● Warfield Review the full disclosure principle and describe how it is implemented. Discuss the disclosure requirements for related-party transactions, post-balance-sheet events, major business segments, and interim reporting. LEARNING OBJECTIVES Identify the major disclosures in the auditor’s report and understand management’s responsibilities for the financial statements. Identify reporting issues related to financial forecasts and fraudulent financial reporting. After studying this chapter, you should be able to: Full Disclosure in Financial Reporting 24 LO 1 Full disclosure principle calls for financial reporting of any financial facts significant enough to influence the judgment of an informed reader. Financial disasters at Microstrategy, PharMor, WorldCom, and Lehman highlight the difficulty of implementing the full disclosure principle. FULL DISCLOSURE PRINCIPLE LO 1 ILLUSTRATION 24-1 Types of Financial