Lecture

Financial Accounting Basics

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In course

FIN-411: Accounting for finance

The objective of the course is to provide participants with accounting mechanisms for understanding and anaalyzing the financial statements of a company. ...

Description

This lecture introduces the fundamental concepts of financial accounting, covering topics such as the accounting process, types of accounting information, the role of an information system, and the basic functions of an accounting system. It also delves into the definition of accounting, the development of a conceptual framework, external and internal reporting, and the integrity of accounting information. The instructor explains the objectives of external financial reporting, the concept of a business entity, types of business entities, and provides an overview of financial statements like the balance sheet, income statement, and statement of cash flows.

Official source

Ontological neighbourhood

Business

Accounting: Financial accounting

Related concepts (32)

Financial statement

Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand. They typically include four basic financial statements accompanied by a management discussion and analysis: A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.

Internal audit

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. Internal auditing might achieve this goal by providing insight and recommendations based on analyses and assessments of data and business processes.

Statement of changes in equity

A statement of changes in equity and similarly the statement of changes in owner's equity for a sole trader, statement of changes in partners' equity for a partnership, statement of changes in shareholders' equity for a company or statement of changes in taxpayers' equity for government financial statements is one of the four basic financial statements. The statement explains the changes in a company's share capital, accumulated reserves and retained earnings over the reporting period.

Financial audit

A financial audit is conducted to provide an opinion whether "financial statements" (the information is verified to the extent of reasonable assurance granted) are stated in accordance with specified criteria. Normally, the criteria are international accounting standards, although auditors may conduct audits of financial statements prepared using the cash basis or some other basis of accounting appropriate for the organization.

International Financial Reporting Standards

International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's financial performance and position so that company financial statements are understandable and comparable across international boundaries. They are particularly relevant for companies with shares or securities publicly listed.

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