1. Statement of Cash Flows and Consolidated Statements

2. Cash and Cash Equivalents

3. Classification OperatingInvestingFinancing

4. Direct vs. Indirect Direct report major classes of receipts/payments Indirect reconcile net income to net cash

7. Consolidated Financial Statements CorporationAffiliate

8. Consolidation Abuse Must consolidate “controlled” subsidiaries Definition of “control” has changed from quantitative to qualitative

9. Elimination Parent’s “Investment in Subsidiary” account is replaced with the subsidiary’s assets and liabilities

10. Development of Accounting Principles GAAP = G enerally A ccepted A ccounting P rinciples

11. The Players

12. Accounting vs. Auditing

13. The Role of Congress