After studying this chapter, you should be able to:
A recent report says it best: “Accounting information is central to the functioning of international capital markets and to managing small businesses, conducting effective government, understanding business processes, and … how economic decisions are made. … Across the globe, a common characteristic of economies that flourish is the presence of reliable accounting information.”
Many in the United States take pride in our system of financial reporting as being the most robust and transparent in the world. But most would also comment that we can do better, particularly in light of the many accounting scandals that have occurred at companies like AIG, WorldCom, and Lehman Brothers, and the financial crisis of 2008. ...