What ience between financial statements and financial repoting CA1-s (objective of Financial Reporting) by a lange manufacturing company. She has been rent Preliminary Views published by the Financial Accounting Standards ceptual framework, and she believes that these concept Preliminary Views. She has prepared a rough draft of the asked by Jose Martinez, controller, to prepare the company's response to a Board (FASB). Sepan knows that the FASB has a Karen Sepan, a recent graduate of the local state university, is presently em a con- the company's response to the statements could be used to support response citing the objective of financial reporting a) Identify the objective of financial reporting b) Describe the level of sophistication expected of the users of financial information by l reporting continuing -s Acounting Numbers and the Environment) Hardly a day goes byrchase incentives, poor lending without an article appearing on the fallout from the financial crisis of 2008. An overheated real estate market, fueled by m practices, and securitization through high-risk, mortgage-backed securities, led to a near collapst bej a consequence, many have argued that if the financial institutions had been required to rep investments) at fair value instead of cost, large losses would have been reported earlier. This wou the problems in the mortgage markets and therefore minimized the losses to U.S taxpayers. of global capital markets. As oans (and loan-backed ld have signaled regulators to o their l to Us arlier. Tortthor Explain how reported accounting numbers might affect an individual's perceptions and actions. Cite two examples CA1-7 WRITING (Need for GAAP) Some argue that having various organizations establish accounting principles is wasteful considered important. In addition, if an investor wants additional information, the investor could contact the company and pay and inefficient. Rather than mandating accounting rules, each company could voluntarily disclose the type of information it receive the additional information desired Instructions omment on the appropriateness of this viewpoint. merican Institute of Certified Public Accountants, Initially, it was the primary organization that es A1-8 (AICPA's Role in Rule-Making) One of the major groups that has been involved in the standard-setting process is les in the United States Subsequently, it relinquished its power to the FASB tablished accounting prin