FRA Flashcards
The preparation of financial information and statements to stakeholders including shareholders and creditors to help inform their economic decision making is known as …?
Financial Reporting
What is the difference between financial statements and management accounts?
Financial statements are prepared for external use, management accounts are internal
A snapshot of financial position at a given moment in time and consists of a companies assets, liabilities and equity is what sort of financial statement?
Balance sheet
What is the equity equation?
Equity = Net Assets = A – L
What is capital structure?
The blend of equity and liabilities used to fund a company
What are the 2 elements of a firms equity?
- Retained earnings
2. Contributed Capital
Which financial statement reconciles the equity at the beginning of the period and the equity at the end of the period by incorporating profit for the year, dividends paid, revaluation gain
Statement of Changes in Equity
What are the three components of a cash flow statement?
- Operating CF
- Investing CF
- Financing CF
What is the purpose of the Management Discussion & Analysis section of financial statements?
Management discuss the nature of the business, objectives, historic performance, key relationships, resources and risks etc
What are the 5 types of audit opinion
Unqualified opinion Qualified opinion Adverse opinion Disclaimer of opinion Modified opinion
A firm will continue to operate for the next 12 months is said to be a …?
Going Concern
What is the objective of an audit?
To certifying the trueness and fairness of the financial statements
An independent review of an entities financial statements by a third party accounting firm, is also known as an?
Audit
Which form is issued when a company makes an acquisition or disposal?
8-K
What form is issued when a firm issues its annual report
10-K
Which form is issued when a firm issues its quarterly financial reports?
10-Q
Which form is filed prior to the sale of new securities to the public?
S-1
What statement is issued to shareholders when there are matters that require a shareholder vote?
Proxy Statement
What are the 6 steps of FS analysis?
- State Objective
- Gather data
- Process data
- Analyse and interpret the data
- Conclude and Recommend
- Update the analysis
What is the difference between standard setting bodies and regulatory bodies?
Standard-setting bodies are professional organizations of accountants and auditors that establish financial reporting standards.
Regulatory authorities are government agencies that have the legal authority to enforce compliance with financial reporting standards.
Who prepares the IFRS?
The IASB (International Accounting Standards Board)
Who prepares US GAAP?
FASB (Financial Accounting Standards Board)
Who are IOSCO?
IOSCO regulate more than 95% of the world’s financial markets
Which act prohibits a company’s external auditor from providing certain additional paid services to the company, to avoid the conflict of interest involved and to promote auditor independence?
Sarbanes-Oxley Act of 2002