A Short Primer on Accounting

1. A Short Primer on Accounting Jon AshleyCorinne Mahoney Sandy Montgomery

2. Accountancy • Definition • Different types of Accounting • Rules that Govern Accountancy • Desirable Characteristics of Accounting Information

3. Types of Accounting Questions that a Librarian Might Receive • Accounting as a Career • CPA Exam • Auditing: internal and external • The nature of accounting as a career • Interpretation of Standards • Tax questions

4. Income Statement (P&L) Accounting Terms Net Income Accounts Payable Depreciation Glossaries: • Accounting Dictionary-Accounting Glossary of Accounting Terms (VentureLine): http://www.ventureline.com/glossary.asp • Accounting Terms and Glossary (Finet Holdings): http://www.finet.com.hk/accounting/dictionary.htm • Blackwell Encyclopedic Dictionary of Accounting : Available at UNC in print and via NetLibrary as an eBook. Balance Sheet Accounts Receivable Assets Equity Retained Earnings Liabilities Capital

5. Accounting Resources • Accounting Standards • Handbooks and Dictionaries • Professional Associations • Indexes/Databases • Websites • Annual Reports

6. Accounting Standards Definition: Accounting standards are authoritative statements of how particular types of transaction and other events should be reflected in financial statements. (definition from International Accounting Standards Board) AKA GAAP: Generally Accepted Accounting Principles What do they look like? • FASB Statement No. 34 • FAS 142 • APB Opinion No. 30 • SOP 03-4, Reporting Financial Highlights and Schedule of Investments by Nonregistered Investment Partnerships

7. Organizations that set or regulate standards U.S.A. • AICPA—American Institute of Certified Public Accountants: Issues auditing and other standards for the profession http://www.aicpa.org/index.htm • FASB—Financial Accounting Standards Board: Sets authoritative accounting standards for the private sector http://www.fasb.org/ International • IASB—International Accounting Standards Board: The leading promulgator of international accounting standards. http://www.iasb.org/ • Information on IASB standards and international accounting is also available at IAS Plus maintained by Deloitte. http://www.iasplus.com/ Country Specific • IAS Plus provides a list of authoritative resources by country. http://www.iasplus.com/country/country.htm

8. Standards: Print Resources • FASB Original Pronouncements Accounting Standards • AICPA Professional Standards • Miller GAAP Guide (Generally Accepted Accounting Principles): Provides a restatement and interpretation of the FASB standards. • Miller GAAS Guide (Generally Accepted Auditing Standards): Provides an overview of common auditing practice. • Miller Governmental GAAP Guide: Covers government accounting. • Wiley'sInterpretation and Application of International Accounting Standards : IAS: Provides a summary and interpretation of the IASC's international standards.

9. Accounting Handbooks & Manuals • AICPA Audit and Accounting Manual: One-volume manual that explains and demonstrates useful techniques and procedures for conducting compilation, review, and audit engagements • Accountants' Handbook by Carmichael, Lilien, and Mellman. Vol. 1: Financial Accounting and General Topics; Vol. 2: Specialized Industries and Special Topics. • Accounting Trends & Techniques: annual survey of accounting practices from the AICPA

10. Professional Associations • American Accounting Association (AAA): http://aaahq.org/index.cfm • American Institute of Certified Public Accountants (AICPA):http://www.aicpa.org/index.htm • Institute of Management Accountants (IMA): Publishes Statements on Management Accounting http://www.imanet.org/ima/index.asp • National Association of Small Business Accountants:http://www.smallbizaccountants.com/ • List of Associations available on Rutgers University Libraries’ Accounting Research Guide: http://www.libraries.rutgers.edu/rul/rr_gateway/research_guides/busi/account.shtml#C

11. Accounting Literature Accounting Specific: • Accounting & Tax Index (Print): Comprehensive list of books, articles, government documents, and professional reports about accounting, auditing and taxation. • Accounting Research Network: Indexes working papers in Accounting. Taxation: • CCH Tax Research NetWork • Federal Tax Code: http://assembler.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26.html General Business Resources with coverage of Accounting: • ABI/Inform Global • Business & Industry • Factiva • Lexis/Nexis Academic • Mergent Online*

12. Accounting Websites • Rutgers Accounting Web: Excellent portal to accounting resources on the Internethttp://accounting.rutgers.edu/raw/ • CPAnet: a resource directory of websites that are of interest to the accounting profession. CPAnet includes over 800 links to various accounting related websites http://www.cpanet.com/ • Tax Links: IRS revenue rulings since 1954 http://www.taxlinks.com/ • AICPA State: Link to resources at the state level http://www.aicpa.org/states/stmap.htm

13. Company Reports SEC Filings & Forms (EDGAR): All companies, foreign and domestic, are required to file registration statements, periodic reports, and other forms electronically through EDGAR. Anyone can access and download this information for free. http://www.sec.gov/edgar.shtml Barron’s Annual Report Service: A free service that provides quick access to annual reports and other information on select companies. http://barronsonline.ar.wilink.com/asp/BAR5_search_ENG.asp

14. Challenges The way we use our numbers can have large consequences. For example: Enron – Arthur Andersen - WorldCom – HealthSouth - Tyco - Parmalat – Mirant – Duke Energy – Global Crossing - Halliburton – Adelphia – Lucent Technologies – Xerox - Shell Oil - Fannie Mae - Freddie Mac - Social Security

15. Challenges • PR problem – how can we trust our numbers? • Independent and trustworthy auditors • Greater transparency • More government oversight (?) • Sarbanes-Oxley & recent backlash • Proactive vs. reactive accounting

16. Challenges • How to account for derivatives? • How to measure fair value? • How to expense stock options? • How to account for rises and losses in pensions? • What constitutes “real” earnings? • Pressure for non-profits to conform to Sarbanes-Oxley standards

17. Non-Profits Government Agencies Mergers & Acquisitions Decision Making Relationship to Other TopicsAccounting in some way influences the following: