10/10/23,d8:37dPM TestdbankdfordIntermediatedAccountingdVolumed1,d13thdCanadiandEditiondby
…
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
TestdbankdfordIntermediatedAccountingdVolum
ed1,d13thdCanadiandEditiondbydDonalddE.dKieso
Full d download d link: d https://qidiantiku.com
/ dt est- db ank-for- d intermediate- da ccounting-
volume-1-13th- d canadian- de dition-by-
donald-e-d kieso.shtml
CHAPTER d 1
THEdCANADIANdFINANCIALdREPORTINGdENVIRONMENTdCHAPT
ERdSTUDYdOBJECTIVES
1. Understandd thed financiald reportingd environment.d Accountingd providesd rel
iable,drelevant,danddtimelydinformationdtodmanagers,dinvestors,danddcreditorsdso
dthatdresourcesdaredallocateddtodthedmostdefficientdenterprises.dAccountingdalso
dprovidesdmeasurementsdofdefficiencyd(profitability)danddfinancialdsoundness.dIn
vestors,dcreditors,dmanagement,dsecuritiesdcommissions,dstockdexchanges,danal
ysts,dcreditdratingdagencies,dauditors,danddstandarddsettersdaredsomedofdthedm
ajordstakeholders.dIllustrationd1-4dexplainsdwhatdisdatdstakedfordeachdone.dThe
1-1
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
objectivedofdfinancialdreportingdisdtodcommunicatedinformationdthatdisdusefuldtodke
yddecisiondmakersdsuchdasdinvestorsdanddcreditorsdindmakingdresourcedallocationd
decisionsd(includingdassessingdmanagementdstewardship)daboutdthedresourcesdand
dclaimsdtodresourcesdofdandentitydanddhowdthesedaredchanging.dIdeally,dalldstakeh
oldersdshoulddhavedaccessdtodthedsamedinformationdindorderdtodensuredthatdgoodd
decisionsdaredmadedindthedcapitaldmarketplace.d(Thisdisdknowndasdinformationdsy
mmetry.)dHowever,dthisdisdnotdthedcase—
theredisdoftendinformationdasymmetry.dOfdnecessity,dmanagementdhasdaccessdtodm
oredinformationdsodthatditdcandrundthedcompany.dItdmustdalsodmakedsuredthatditdd
oesdnotdgivedawaydinformationdthatdmight
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…
1-1
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
objectivedofdfinancialdreportingdisdtodcommunicatedinformationdthatdisdusefuldtodke
yddecisiondmakersdsuchdasdinvestorsdanddcreditorsdindmakingdresourcedallocationd
decisionsd(includingdassessingdmanagementdstewardship)daboutdthedresourcesdand
dclaimsdtodresourcesdofdandentitydanddhowdthesedaredchanging.dIdeally,dalldstakeh
oldersdshoulddhavedaccessdtodthedsamedinformationdindorderdtodensuredthatdgoodd
decisionsdaredmadedindthedcapitaldmarketplace.d(Thisdisdknowndasdinformationdsy
mmetry.)dHowever,dthisdisdnotdthedcase—
theredisdoftendinformationdasymmetry.dOfdnecessity,dmanagementdhasdaccessdtod
moredinformationdsodthatditdcandrundthedcompany.dItdmustdalsodmakedsuredthatdit
ddoesdnotdgivedawaydinformationdthatdmightdharmdthedcompany,dsuchdasdindadlaw
suitdwhereddisclosuredmightdcausedthedcompanydtodlose.dAsidedfromdthis,dinformati
ondasymmetrydexistsdbecausedofdmanagementdbiasdwherebydmanagementdactsdindi
tsdowndself-
interest,dsuchdasdwantingdtodmaximizedmanagementdbonuses.dThisdisdknowndasdm
oraldhazarddindaccountingdtheory.
Informationdasymmetrydcausesdmarketsdtodbedlessdefficient.dItdmaydcausedstockdp
ricesdtodbeddiscounteddordcostsdofdcapitaldtodincrease.dIndaddition,ditdmightddetrac
tdgooddcompaniesdfromdraisingdcapitaldindthedparticulardmarketdwheredrelevantdinf
ormationdisdnotdavailabled(referreddtodasdadversedselectiondindaccountingdtheory).d
Thedefficientdmarketsdhypothesisdisdfeltdtodexistdonlydindadsemi-
strongdform,dmeaningdthatdonlydpubliclydavailabledinformationdisdassimilateddintods
tockdprices.
2. Explaind thed needd ford accountingd standardsd andd identifyd thed majord enti
tiesd thatd influenced standardd settingd andd financiald reporting.d Thed accounting
dprofessiondhasdtrieddtoddevelopdadsetdofdstandardsdthatdisdgenerallydaccepteddan
dduniversallydpractised.dThisdisdknowndasdGAAPd(generallydaccepteddaccountingdpr
inciples).dWithoutdthisdsetdofdstandards,deachdenterprisedwoulddhavedtoddevelopdit
sdowndstandards,danddreadersdofdfinancialdstatementsdwoulddhavedtodbecomedfam
iliardwithdeverydcompany’sdparticulardaccountingdanddreportingd practices.dAsdadre
sult,ditdwoulddbedalmostdimpossibledtodpreparedstatementsdthatdcoulddbedcompare
d.dIndaddition,daccountingdstandardsdhelpddealdwithdthedinformationdasymmetrydpr
oblem.
ThedCanadiandAccountingdStandardsdBoardd(AcSB)disdthedmaindstandard-
settingdbodydindCanadadfordprivatedcompanies,dpensiondplans,danddnot-for-
profitdentities.dItsdmandatedcomesdfromdthedCanadadBusinessdCorporationsdActdand
dRegulationsdasdwelldasdprovincialdactsdofdincorporation.dFordpublicdcompanies,dGA
APdisdInternationaldFinancialdReportingdStandardsd(IFRS)dasdestablisheddbydthedInt
ernationaldAccountingdStandardsdBoardd(IASB).dPublicdcompaniesdaredrequireddtodf
ollowdGAAPdindorderdtodaccessdcapitaldmarkets,dwhichdaredmonitoreddbydprovincial
dsecuritiesdcommissions.dThedFinancialdAccountingdStandardsdBoardd(FASB)disdalso
dimportantdasditdinfluencesdIFRSdstandarddsetting.dPrivatedcompaniesdmaydchoosed
todfollowdIFRS.dPublicdcompaniesdthatdlistdondU.S.dstockdexchangesdmaydchoosedto
dfollowdU.S.dGAAP.
3. Explaind thed meaningd ofd generallyd acceptedd accountingd principlesd (GAAP)
d andd thed significanced ofd professionald judgementd ind applyingd GAAP.d General
lyd accepteddaccountingdprinciplesdaredeitherdprinciplesdthatdhavedsubstantialdauth
oritativedsupport,dsuchdasdthedCPAdCanadadHandbook,dordthosedarriveddatdthroug
hdthedusedofdprofessionaldjudgementdanddthedconceptualdframework.dProfessional
djudgementdplaysdandimportantdroledindAccountingdStandardsdfordPrivatedEnterpris
esd(ASPE)danddIFRSdsincedmuchdofdGAAPdisdbaseddondgeneraldprinciples,
1-2
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
whichdneeddtodbedinterpreted.
4. Discussd somed ofd thed challengesd andd opportunitiesd ford accounting.d Some
d ofdthedchallengesdfacingdaccountingdaredthedimpactdofdtechnology,dsustainability
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,10/10/23,d8:37dPM TestdbankdfordIntermediatedAccountingdVolumed1,d13thdCanadiandEditiondby
…
dreporting,doversightdindthedcapitaldmarkets,dcentrality dofdethics, dstandarddsettingd
indadpoliticaldenvironment,danddprinciples-dversusdrules-
baseddstandarddsetting.dAlldofdthesedrequiredthedaccountingdprofessiondtodcontinu
edtodstrivedfordexcellencedanddtodunderstanddhowdaccountingdaddsdvaluedindthedc
apitaldmarketplace.
about:blank 3/47
, 10/10/23,d8:37dPM TestdbankdfordIntermediatedAccountingdVolumed1,d13thdCanadiandEditiondby
…
1-2
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
whichdneeddtodbedinterpreted.
4.d Discussd somed ofd thed challengesd andd opportunitiesd ford accounting.d Some
d ofdthedchallengesdfacingdaccountingdaredthedimpactdofdtechnology,dsustainability
dreporting,doversightdindthedcapitaldmarkets,dcentrality dofdethics, dstandarddsettingd
indadpoliticaldenvironment,danddprinciples-dversusdrules-
baseddstandarddsetting.dAlldofdthesedrequiredthedaccountingdprofessiondtodcontinu
edtodstrivedfordexcellencedanddtodunderstanddhowdaccountingdaddsdvaluedindthedc
apitaldmarketplace.
1-3
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
MULTIPLEdCHOICEdQUESTIONS
Answer No. Description
d 1. Accountingdcharacteristics
a 2. Naturedofdfinancialdaccounting
c 3. Definitiondofdfinancialdaccounting
b 4. Definitiondofdmanagementdaccounting
d fl. Efficientdusedofdresources
about:blank 4/47
…
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
TestdbankdfordIntermediatedAccountingdVolum
ed1,d13thdCanadiandEditiondbydDonalddE.dKieso
Full d download d link: d https://qidiantiku.com
/ dt est- db ank-for- d intermediate- da ccounting-
volume-1-13th- d canadian- de dition-by-
donald-e-d kieso.shtml
CHAPTER d 1
THEdCANADIANdFINANCIALdREPORTINGdENVIRONMENTdCHAPT
ERdSTUDYdOBJECTIVES
1. Understandd thed financiald reportingd environment.d Accountingd providesd rel
iable,drelevant,danddtimelydinformationdtodmanagers,dinvestors,danddcreditorsdso
dthatdresourcesdaredallocateddtodthedmostdefficientdenterprises.dAccountingdalso
dprovidesdmeasurementsdofdefficiencyd(profitability)danddfinancialdsoundness.dIn
vestors,dcreditors,dmanagement,dsecuritiesdcommissions,dstockdexchanges,danal
ysts,dcreditdratingdagencies,dauditors,danddstandarddsettersdaredsomedofdthedm
ajordstakeholders.dIllustrationd1-4dexplainsdwhatdisdatdstakedfordeachdone.dThe
1-1
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
objectivedofdfinancialdreportingdisdtodcommunicatedinformationdthatdisdusefuldtodke
yddecisiondmakersdsuchdasdinvestorsdanddcreditorsdindmakingdresourcedallocationd
decisionsd(includingdassessingdmanagementdstewardship)daboutdthedresourcesdand
dclaimsdtodresourcesdofdandentitydanddhowdthesedaredchanging.dIdeally,dalldstakeh
oldersdshoulddhavedaccessdtodthedsamedinformationdindorderdtodensuredthatdgoodd
decisionsdaredmadedindthedcapitaldmarketplace.d(Thisdisdknowndasdinformationdsy
mmetry.)dHowever,dthisdisdnotdthedcase—
theredisdoftendinformationdasymmetry.dOfdnecessity,dmanagementdhasdaccessdtodm
oredinformationdsodthatditdcandrundthedcompany.dItdmustdalsodmakedsuredthatditdd
oesdnotdgivedawaydinformationdthatdmight
about:blank 1/47
,10/10/23,d8:37dPM TestdbankdfordIntermediatedAccountingdVolumed1,d13thdCanadiandEditiondby
…
1-1
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
objectivedofdfinancialdreportingdisdtodcommunicatedinformationdthatdisdusefuldtodke
yddecisiondmakersdsuchdasdinvestorsdanddcreditorsdindmakingdresourcedallocationd
decisionsd(includingdassessingdmanagementdstewardship)daboutdthedresourcesdand
dclaimsdtodresourcesdofdandentitydanddhowdthesedaredchanging.dIdeally,dalldstakeh
oldersdshoulddhavedaccessdtodthedsamedinformationdindorderdtodensuredthatdgoodd
decisionsdaredmadedindthedcapitaldmarketplace.d(Thisdisdknowndasdinformationdsy
mmetry.)dHowever,dthisdisdnotdthedcase—
theredisdoftendinformationdasymmetry.dOfdnecessity,dmanagementdhasdaccessdtod
moredinformationdsodthatditdcandrundthedcompany.dItdmustdalsodmakedsuredthatdit
ddoesdnotdgivedawaydinformationdthatdmightdharmdthedcompany,dsuchdasdindadlaw
suitdwhereddisclosuredmightdcausedthedcompanydtodlose.dAsidedfromdthis,dinformati
ondasymmetrydexistsdbecausedofdmanagementdbiasdwherebydmanagementdactsdindi
tsdowndself-
interest,dsuchdasdwantingdtodmaximizedmanagementdbonuses.dThisdisdknowndasdm
oraldhazarddindaccountingdtheory.
Informationdasymmetrydcausesdmarketsdtodbedlessdefficient.dItdmaydcausedstockdp
ricesdtodbeddiscounteddordcostsdofdcapitaldtodincrease.dIndaddition,ditdmightddetrac
tdgooddcompaniesdfromdraisingdcapitaldindthedparticulardmarketdwheredrelevantdinf
ormationdisdnotdavailabled(referreddtodasdadversedselectiondindaccountingdtheory).d
Thedefficientdmarketsdhypothesisdisdfeltdtodexistdonlydindadsemi-
strongdform,dmeaningdthatdonlydpubliclydavailabledinformationdisdassimilateddintods
tockdprices.
2. Explaind thed needd ford accountingd standardsd andd identifyd thed majord enti
tiesd thatd influenced standardd settingd andd financiald reporting.d Thed accounting
dprofessiondhasdtrieddtoddevelopdadsetdofdstandardsdthatdisdgenerallydaccepteddan
dduniversallydpractised.dThisdisdknowndasdGAAPd(generallydaccepteddaccountingdpr
inciples).dWithoutdthisdsetdofdstandards,deachdenterprisedwoulddhavedtoddevelopdit
sdowndstandards,danddreadersdofdfinancialdstatementsdwoulddhavedtodbecomedfam
iliardwithdeverydcompany’sdparticulardaccountingdanddreportingd practices.dAsdadre
sult,ditdwoulddbedalmostdimpossibledtodpreparedstatementsdthatdcoulddbedcompare
d.dIndaddition,daccountingdstandardsdhelpddealdwithdthedinformationdasymmetrydpr
oblem.
ThedCanadiandAccountingdStandardsdBoardd(AcSB)disdthedmaindstandard-
settingdbodydindCanadadfordprivatedcompanies,dpensiondplans,danddnot-for-
profitdentities.dItsdmandatedcomesdfromdthedCanadadBusinessdCorporationsdActdand
dRegulationsdasdwelldasdprovincialdactsdofdincorporation.dFordpublicdcompanies,dGA
APdisdInternationaldFinancialdReportingdStandardsd(IFRS)dasdestablisheddbydthedInt
ernationaldAccountingdStandardsdBoardd(IASB).dPublicdcompaniesdaredrequireddtodf
ollowdGAAPdindorderdtodaccessdcapitaldmarkets,dwhichdaredmonitoreddbydprovincial
dsecuritiesdcommissions.dThedFinancialdAccountingdStandardsdBoardd(FASB)disdalso
dimportantdasditdinfluencesdIFRSdstandarddsetting.dPrivatedcompaniesdmaydchoosed
todfollowdIFRS.dPublicdcompaniesdthatdlistdondU.S.dstockdexchangesdmaydchoosedto
dfollowdU.S.dGAAP.
3. Explaind thed meaningd ofd generallyd acceptedd accountingd principlesd (GAAP)
d andd thed significanced ofd professionald judgementd ind applyingd GAAP.d General
lyd accepteddaccountingdprinciplesdaredeitherdprinciplesdthatdhavedsubstantialdauth
oritativedsupport,dsuchdasdthedCPAdCanadadHandbook,dordthosedarriveddatdthroug
hdthedusedofdprofessionaldjudgementdanddthedconceptualdframework.dProfessional
djudgementdplaysdandimportantdroledindAccountingdStandardsdfordPrivatedEnterpris
esd(ASPE)danddIFRSdsincedmuchdofdGAAPdisdbaseddondgeneraldprinciples,
1-2
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
whichdneeddtodbedinterpreted.
4. Discussd somed ofd thed challengesd andd opportunitiesd ford accounting.d Some
d ofdthedchallengesdfacingdaccountingdaredthedimpactdofdtechnology,dsustainability
about:blank 2/47
,10/10/23,d8:37dPM TestdbankdfordIntermediatedAccountingdVolumed1,d13thdCanadiandEditiondby
…
dreporting,doversightdindthedcapitaldmarkets,dcentrality dofdethics, dstandarddsettingd
indadpoliticaldenvironment,danddprinciples-dversusdrules-
baseddstandarddsetting.dAlldofdthesedrequiredthedaccountingdprofessiondtodcontinu
edtodstrivedfordexcellencedanddtodunderstanddhowdaccountingdaddsdvaluedindthedc
apitaldmarketplace.
about:blank 3/47
, 10/10/23,d8:37dPM TestdbankdfordIntermediatedAccountingdVolumed1,d13thdCanadiandEditiondby
…
1-2
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
whichdneeddtodbedinterpreted.
4.d Discussd somed ofd thed challengesd andd opportunitiesd ford accounting.d Some
d ofdthedchallengesdfacingdaccountingdaredthedimpactdofdtechnology,dsustainability
dreporting,doversightdindthedcapitaldmarkets,dcentrality dofdethics, dstandarddsettingd
indadpoliticaldenvironment,danddprinciples-dversusdrules-
baseddstandarddsetting.dAlldofdthesedrequiredthedaccountingdprofessiondtodcontinu
edtodstrivedfordexcellencedanddtodunderstanddhowdaccountingdaddsdvaluedindthedc
apitaldmarketplace.
1-3
TestdBankdfordIntermediate dAccounting,dThirteenthdCanadiandEditiond d Alldchapterddownloa
MULTIPLEdCHOICEdQUESTIONS
Answer No. Description
d 1. Accountingdcharacteristics
a 2. Naturedofdfinancialdaccounting
c 3. Definitiondofdfinancialdaccounting
b 4. Definitiondofdmanagementdaccounting
d fl. Efficientdusedofdresources
about:blank 4/47
