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‘The fundamentals of financial accounting’ explores the basic ideas of financial accounting: the way accounting actually works, the logic behind the double-entry recording system, and the contents of the basic financial statements (balance sheet, income statement, and cash flow statement). The following questions are addressed: What does a balance sheet try to show? Why does it balance? How is it that any one transaction has two accounting effects? Which costs lead to assets and which lead to expenses? How do cash flows fit in? How can a profitable company go bust because of a lack of cash? ...Less

What are the purposes of accounting? How do these purposes affect how accounting works? What is double-entry bookkeeping? ‘The international evolution of accounting’ considers these questions and outlines some examples of how different countries have contributed to the development of accounting. Double-entry bookkeeping, conceived in thirteenth-century Italy, balances the debits and credits. It enables the calculation of profit and the presentation of a business's financial position. Publication of accounting information is required to protect shareholders and creditors from potential malpractice by company directors. The globalization of world business has resulted in International Financial Reporting Standards, now used by around 90 countries. The US use their Financial Accounting Standards Board's ‘generally accepted accounting principles’. ...Less

‘Regulation and audit’ examines some aspects of the regulation of financial reporting by looking at two national examples of regulatory frameworks: the UK and the USA. It addresses such questions as: why was the UK the first country to require published audited financial statements from companies? What sort of regulation does the state impose on accounting? Why does the USA have the world's oldest and toughest regulator of financial reporting? What is the purpose of audit? Does it really work? How is an audit conducted? The background to auditing is provided and the duties and responsibilities of auditors are explained. ...Less