Note: To create your own PDF version of the SM go to File: "Save As Adobe PDF". Chapter Opener: Thinking Critically Can you think of any organizations that would be interested in how Uber is performing? Managerial Implications: Thinking Critically Discussion Questions 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. The purpose of the Public Company Accounting Oversight Board is to oversee the accounting profession through its investigative and enforcement powers and to discipline corrupt accountants and auditors. SEC, AICPA, AAA. The Public Company Accounting Reform and Investor Protection Act of 2002 was passed in response to the wave of corporate accounting scandals starting with the demise of Enron Corporation in 2001, the arrest of top executives at WorldCom and Adelphia Communications Corporations, and ultimately, the demise of Arthur Andersen, an international public accounting firm. Managers use financial information to make decisions about adding new products and services, offering current products and services, and choosing vendors. Statements of Financial Accounting Standards. Note to instructor: These questions are designed to check students’ understanding of new terms, concepts, and procedures presented in the chapter. Advice on how to structure financial affairs in order to reduce taxes without violating tax laws. Owners and managers: evaluate operations. Suppliers: assess ability of a firm to pay debts. Banks: ability to repay loans. Tax authorities: determine a tax base. Governmental agencies: legal compliance. Employees: wage levels and profit-sharing plans. Public, managerial, and governmental. Auditing, tax, and management advisory services. Measure business performance; separate entity. Establish accounting policies, direct the accounting system, prepare and interpret financial statements, provide financial advice, prepare tax forms. Regulation of financial reporting by publicly owned corporations. Stockholders, the IRS, SEC, banks, lenders and creditors are all examples of organizations that would be interested in how Uber is performing. Sole proprietorship (owned by one person). Partnership (owned by two or more people). Corporation (can be owned by one person or many). C