intro accounting wgu

What is Accounting?

The foundation of business decision making providing the financial insights needed for growth and stability.

Fraud Triangle

A model explaining the three key elements that lead to fraud: Opportunity, Pressure, and Rationalization.

Financial Statement Fraud

The act of misrepresenting financial information, often referred to as 'cooking the books'.

Opportunity in Fraud

The chance to commit fraud, usually stemming from weak internal controls.

Pressure in Fraud

The motivation to commit fraud, often due to financial difficulties.

Rationalization in Fraud

The justification or mindset that allows a person to commit fraud.

Revenue

The value of goods and services sold or provided to customers.

Expenses

Costs associated with providing goods or services.

Net Income (Net Loss)

Determined by comparing revenues and expenses.

Understating Expenses

A method of financial statement fraud where expenses are minimized to inflate profits.

Overvaluing Assets

Recording assets at a higher value than they are worth to misrepresent financial health.

Understating Liabilities

Concealing the true financial obligations of a company to present a healthier balance sheet.

Financial Literacy

Understanding core accounting principles and how they apply to real-world businesses

Business Strategy

Using financial and managerial accounting to support decision-making

Ethical and regulatory awareness

Recognizing fraud risks, internal controls, and compliance standards that safeguard financial integrity.

Financial accuracy

Ensures suppliers are paid, employees have fair wages, and investors trust business performance

Sarbanes-Oxley Act (SOX)

A US law that enhances corporate accountability and financial transparency (protects investors from fraudulent financial reporting)