the statement of cash flows in earlier chapters may choose to omit Chapter 13 or cover
it in an overview manner. Instructors who choose to cover Chapter 13 in depth will
find that students will have an easier time grasping and understanding the statement
of cash flows.SARBANES-OXLEY
Because of the importance of the Sarbanes-Oxley Act, Chapter 7, “Sarbanes-Oxley,
Internal Control, Cash,” has been revised to include a discussion of Sarbanes-Oxley
and its importance for business. The coverage of Sarbanes-Oxley naturally leads into
the discussion of internal controls. Chapter 7 concludes with a discussion of how inter-
nal controls are applied to cash.NEW TO THIS EDITION
- New Co-AuthorDr. Jonathan Duchac of Wake Forest University. Dr. Duchac
brings a fresh perspective to the accounting profession with his teaching awards
and professional involvements. His contributions to every chapter in the second
edition have given the text effective pedagogy and real world relevance. - Unique Approach!The second edition utilizes the Integrated Financial Statement
Framework to clearly show the impact of transactions on the balance sheet, income
statement, and the statement of cash flows, while showing the interrelationship
among these financial statements. This approach provides students with a sound
understanding of how the financial statements work together to provide a picture
of a company’s financial performance, while at the same time teaching students
the impact of transactions on the financial statements. This helps students get to
the “ah-ha” moment in accounting sooner by focusing on how the financial state-
ments come together beforeintroducing debits and credits. - Basic accounting concepts are introduced in Chapter 2using only cash transac-
tions and the integrated financial statements framework. Accrual accounting con-
cepts and transactions are introduced in Chapter 3 using the integrated financial
statement framework. Debits and credits are not introduced until Chapter 4, when
students have a firm understanding of basic and accrual accounting concepts. The
authors gradually move first to cash, and then to accrual, making it easier for
students to first pick up the basic framework of accounting, and then move on to
the more complicated material of accrual accounting. - Added coverage of Sarbanes-Oxley and Responsible Reporting to enhance
students’ understanding of how the information in this course can be applied in
the real world, with real regulations and real consequences. Chapter 1 has a new
section on “Responsible Reporting” analyzing how individual character, firm
culture, and laws and enforcement contribute to accounting fraud. A new chart
summarizes “Accounting Fraud in the 2000’s,” illustrating how 11 companies vio-
lated accounting concepts and highlighting the result of their fraudulent actions.
Chapter 7, “Sarbanes-Oxley, Internal Control, and Cash,” has been revised and
begins with a discussion of Sarbanes-Oxley. - Emphasis on EthicsFeatured in the “Integrity, Objectivity, and Ethics in Business”
boxed items throughout the chapters. The ethics boxed feature emphasizes the
xviii Preface