Why and How Audited Financial Accounting Statements Are Useful

George J. Benston, Michael Bromwich, Robert E. Litan and Alfred Wagenhofer

in Worldwide Financial Reporting

Published in print March 2006 | ISBN: 9780195305838
Published online February 2006 | e-ISBN: 9780199783342 | DOI:
  Why and How Audited Financial Accounting Statements Are Useful

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Investors, creditors, government officials, and others require information to evaluate companies’ economic position, performance, and prospects. This chapter examines the usefulness of financial accounting statements and their limitations in providing this information, particularly measures of economic values. The essential features of the traditional market-transaction, cost-based accounting system, and the benefits and costs of fair-value accounting and of audits and attestations by independent public accountants (IPAs) are described and evaluated.

Keywords: investors information; creditors information; audited financial accounting data; market-transaction; cost-based accounting; economic values; fair-value accounting; audits; attestations; IPA; independent public accountants

Chapter.  10423 words. 

Subjects: Financial Markets

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