Accounting Both Influences and Is Influenced by the Environment

8949 Words Mar 7th, 2011 36 Pages
Accounting Notes
Accounting both influences and is influenced by the environment which is operates in these which shape the development on accounting include * Regulatory (regulations related to the) environment
Accounting regulations form the rules and principles that govern the structure, content, audit disclosure of financial information. These regulations stop accounts from practicing fraudulent activity and impose penalties and fines, in order to protect investors, creditors etc.
In Australia for example there are three main sources of accounting regulation: 1. Requirements of company legislation (corporations act2001- require that company directors present to shareholders at the annual general meeting an audited income
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Someone opening up a legal firm, one person knows about criminal law other family law
Company- is a business owned by people who own a share of the business. A company is a legal entity and, as such it is an ‘artificial person’ conducting a business in its own name.
The company is created as a separate legal entity from its owners who, are not personally liable for the debts of the company beyond amounts unpaid on their shares.
Types of Companies
Proprietary limited (Pty Ltd): At least 1 but no more than 50 shareholders(generally small), cannot advertise for funds
Public companies- Must have at least 1 member but no maximum number and many are listed on stock ex. May advertise for funds and ownership shares may be bought and sold freely. * Shareholders generally make decisions to these companies and elect a board of directors to act on behalf in their best interests. * Results and Annual reports need to be revealed to the public(income statement, balance sheets) * Auditors(KPMG, PricewaterhouseCoopers) are there to ensure the directors final report is “true” and not misleading to shareholders.
Decision making by shareholders- * Should the directors be reappointed? * What dividend should be paid? (amount of profit received)
Public- Sector Ownerships-
Includes federal and state governments, local councils (departments, statutory authorities, boards and commissions), Business enterprises such as health care services
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