Questions For Review of Key Topics Q1-1 What is the function and primary focus of financial accounting? 1-2 What is meant by the phrase efficient allocation of resources? What mechanism fosters the efficient allocation of resources in the United States? Q1-3 Identify two important variables to be considered when making an investment decision. 0 1-4 What must a company do in the long run to be able to provide a return to investors and creditors? Q1-5 What is the primary objective of financial accounting? Q1-6 Define net operating cash flows. Briefly explain why periodic net operating cash flows may not be a good indicator of future operating cash flows. 01-7 What is meant by GAAP? Why should all companies follow GAAP in reporting to external users? 01-8 Explain the roles of the SEC and the FASB in the setting of accounting standards. Q1-9 Explain the role of the auditor in the financial reporting process. 01-10 List three key provisions of the Sarbanes-Oxley Act of 2002. Order your list from most important to least important in terms of the likely long-term impact on the accounting profession and financial reporting