SASB FSA Level 1 Exam Study Guide with Complete Solutions

SASB FSA Level 1 Exam Study Guide with Complete Solutions Brundtland Report - Correct Answers Published in 1987 in the influential report "Our Common Future" and created by World Commision on Environment and Development of the UN. Discusses sustainable development and the triple bottom line for the first time. European Commission's Action Plan for Financial Sustainable Growth - Correct Answers 3 core strategies: -reorienting capital flows towards a more sustainable economy -mainstreaming sustainability into risk management -fostering transparency and long-termism Stock Market Crash of 1929 - Correct Answers historical example about how a lack of transparency and public reporting can have disastrous consequences US SEC/Securities and Exchange Commission - Correct Answers Protects investors, maintains fair, orderly, and efficient markets, and facilitates capital formation materiality (as defined by the US Supreme Court) - Correct Answers information is material if its exclusion would have altered the "total mix" of information considered by a reasonable investor GAAP - Correct Answers Generally Accepted Accounting Principles historical cost accounting - Correct Answers measured the value of an asset as the actual cost paid at the time of purchase -original nominal value of asset reported on balance sheet, even if the asset's value has changed over time Accounting Principles Board (APB) - Correct Answers replaced CAP to resolve tensions, reduce variation in accounting practices, and establish one standardized practice A statement of basic accounting theory - Correct Answers 1960s report that shifted focus of financial reporting from strict historical asset valuation and toward decision usefulness of reported information to the users of the disclosed information -"provide information which will be of assistance in making economic decisions" FASB (Financial Accounting Standards Board) - Correct Answers Founded to replace APB; identified goal of disclosure and accounting; affirmed decision-usefulness and emphasis on discounted future cash flows as way of valuing assets (as opposed to historical cost accounting) -also stated that economic and social goals of a business are equally important