1. Briefly describe the events that led to Enron being a major player in the oil and gas industry. Briefly describe how Enron misused accounting to show better financial results than the company was actually experiencing.

2. What is the overall objective of accounting?

3. Read the paragraph on page 8 that starts "Accounting is a service activity....." and briefly comment on what insights the paragraph gives as to the purpose of accounting.

4. Who uses accounting information (list both internal and external users)?

5. What is the difference between financial and managerial accounting?

6. What are the three primary financial statements used in external financial reporting?

7. What is the purpose of the notes to the financial statements?

8. What role does an auditor play in the financial reporting process? Why are they important?

9. What does the word "Standard" mean?

10. Why are standards important in financial reporting?

11. Why was the Securities and Exchange Commission (SEC) created? What is the SEC's responsibility in regards to financial reporting?

12. What is the Financial Accounting Standards Board (FASB) and what is their responsibility in regards to financial reporting. Go to the FASB website (www.fasb.org) and identify the 5 current members of the FASB. Read the bios on each member and briefly comment on their respective backgrounds.

13. Briefly describe the FASB's standard-setting process.

14. What is the purpose of the Emerging Issues Task Force (EITF)?

15. Ultimately, who has the authority to enforce accounting standards?

16. What is the purpose/function of the AICPA (American Institute of Certified Public Accountants)?

17. What is the purpose/function of the AAA (American Accounting Association)?

18. What is GAAP? Are all sources of GAAP created equal? Which sources carry the most weight?

19. Do all companies world-wide use US GAAP?

20. Name five major non-U.S. companies.

21. What is the purpose/function of the IASB (International Accounting Standards Board)? Who uses standards created by the IASB? What are standards issued by the IASB called?

22. What is a "conceptual framework" and why is it important in the standard setting process?

23. What are the key financial reporting objectives as outlined by the conceptual framework?

24. What are the five qualitative characteristics of accounting information?

25. What are the three sub-qualities under "Relevance"?

26. What are the three sub-qualities under "Reliability"?

27. What is the difference between comparability and consistency?

28. What is materiality?

29. What is conservatism?

30. In your own words, define each of the 10 elements of the financial statements.

31. What is the difference between recognition and disclosure?

32. What are the five different ways that accounting items are measured?

33. What is the full disclosure principle?

34. What are the five assumptions made in accounting?

35. What are some career options for someone with an accounting degree?