Chapter 1 Accounting and Its Environment QUESTIONS 1. Accounting has been defined as a service activity. Who is served by accounting and how are they benefited? 2. What are the major objectives of financial reporting as specified by the IASB? 3. Briefly describe the four traditional assumptions that influence the conceptual framework. 4. Identify and describe the underlying assumptions specified by the IASB. 5. Alan Rod has recently completed his first year of studying accounting. His instructor for next semester has indicated that the primary focus will be the area of financial accounting. (a) Differentiate between financial accounting and managerial accounting. (b) One part of financial accounting involves the preparation of financial statements. What are the financial statements most frequently provided? (c) What is the difference between financial statements and financial reporting?