The specialized field that handles accounting for business is called financial accounting and provides individuals who are externally linked to that business with information on a company´s financial performance and position. It organizes the transactions of a company by writing down those transactions and creating a financial statement or financial report that summarizes the data in a balance sheet or income statement. If the company is publicly traded, these financial statements will circulate wider, to customers, competitors and employees as well.
The FASB, or Financial Accounting Standards Board, is responsible for creating a standardized system of rules called accounting standards for financial accounting in the United States. These standards are important for financial accounting statements because so many people use these statements in so many different ways. Keeping track of this data helps a company to assess the value of their management and the resources they have allotted them to make their company run better, and financial statements help to determine the effectiveness of management for that company.
Why Financial Accounting is Important
America's financial oligarchy is still in control and, as such, the long-term consequences will be dire!
Financial Industry has Gained Political Power
The American financial industry gained political power over the years by amassing a kind of cultural capital, a belief system in which Washington insiders believe that large financial institutions and free-flowing capital markets are crucial to America's position in the world … and always and utterly convinced that whatever the banks said was true.
America's Oligarchs and the Financial Crisis
This velvet-glove approach is inadequate to change the behavior of a financial sector accustomed to doing business on its own terms, at a time when that behavior must change.The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support.The financial oligarchy's lobby group, the American Bankers Association, was successful in having political pressure brought to bear, by legislators from both parties, against the Financial Accounting Standards Board to do their bidding which now gives banks more discretion in reporting the value of mortgage securities. America's financial oligarchy is firmly in control and, as such, the long-term consequences will be dire!
Subtopics include financial accounting, cost accounting, management accounting, internal auditing external auditing, international accounting, governmental and not-for-profit accounting and taxes. The most common means of conveying information to users is through the preparation of financial statements: 1. the income statement, 2. the balance sheet, 3. the statement of cash flows, and 4. the statement of shareholders' equity.
Subtopics include financial accounting, cost accounting, management accounting, internal auditing external auditing, international accounting, governmental and not-for-profit accounting and taxes. The statement of shareholders' equity shows how the shareholders' equity changed over the period.The current accounting professional body that sets standards is known as the Financial Accounting Standards Board (FASB). The FASB issues standards called Statements of Financial Accounting Standards (SFAS).