LO 1: Forms of Business Organization, Users of Financial Information, Data Analytics, Ethics in Financial Reporting

Vocabulary flashcards covering forms of business organization, internal/external users, data analytics, ethics in reporting, and SOX based on the lecture notes.

Sole Proprietorship

A business owned and operated by a single person; simple to establish, owner-controlled, with tax advantages.

Partnership

A business owned by two or more people with shared control, broader skills and resources, and tax advantages.

Corporation

A separate legal entity that can raise funds more easily, transfer ownership, and provides limited personal liability to owners.

Internal Users of Financial Information

Managers inside the organization who plan, organize, and run the business (e.g., marketing managers, production supervisors, finance directors, officers).

External Users of Financial Information

Investors and creditors (such as suppliers and bankers) who use accounting information to decide whether to buy stock, hold, or lend.

Data Analytics

The process of analyzing data, often with software and statistics, to draw inferences and support decision making.

Ethics in Financial Reporting

The ethical behavior that underpins reliable financial reporting; sound ethics prevents scandals and builds trust.

Sarbanes-Oxley Act (SOX)

U.S. federal legislation enacted in response to major financial scandals; requires governance controls and management certification of financial information.