Escolar Documentos
Profissional Documentos
Cultura Documentos
directors board.
Ponzi scheme: getting into an investment where they pay you interest from money
generated from collectin it from others... but no real money is generating, only
circulating.
A claim for fraud accrues as the claim becomes enforacble i.e. when all elements of
the [claim] can be truthfully alleged in a complaint.’ ” […] In New York, “fraud
requires proof of” five elements: “[i] a material misrepresentation or omission of a
fact, [ii] knowledge of that fact's falsity, [iii] an intent to induce reliance, [iv]
justifiable reliance by the plaintiff, and [v] damages.” […]
If something is missing from the minits, tell the secretary to amend the minutes, if
they don't want to record your statements and questions in the minutes, you better
leave the board...
AUDIT (revizija): is the auditor not in conflict of interest, what kind of methods he
is using, getting any reasurance of the auditor...
Auditor will also look for internal control over financial reporting.
Daubert standard is the general standard to get evidence to court. The Gate keeper
function: Federal rule of evidence 702.
Financial statement: balance sheet, income statement and footnote(they are in the
back of FS)
READ footnotes first of a FS!! Don't look at the numbers first, go to footnotes!
Assets – 3 types:
Current: cash, marketable securities, acc. Receivable, inventory, prepaid expenses,
loans to shareholders – ANY ASSET THAT CAN BE CONVERTED INTO CASH IN
THE NEXT 12 MONTHS
other: intangible assets (you can't hold, smell, but you know its there), security
deposits and due from affiliate or related parties – NOT INTENDED TO BE
CONVERTED INTO CASH WITHIN THE NEXT 12 MONTHS (non current assets)
goodwill is often the difference of value of what is paid for the business and the net
(book) value
Liabilities/obligations:
Current: ITEMS TO BE PAID WITHIN THE NEXT 12 MONTHS (OBLIGATIONS
PAID IN THE NEXT 12 MONTHS) – accounts payable/accured expenses, notes/loan
payable, taxes payable, loans from shareholders
- Sole proprietorship:
**When you pay in common stock and you have excess/additional capital of par
value (of stock buying)
- Partnership:
INCOME STATEMENTS
5 Primary components:
- gross income/sales (total money you collected)
- direct costs/cost of goods sold (cost of the items that generated profit)
- gross profit (varies on location, size, demographics...)
- Operating expenses
- Income taxes
2 methods of accounting:
CASH is simpler: income is recorded when it's received and expenses are recorded
when they are paid. Almost always used for service businesses (accounting, law
firms, architects, builders...)
Accrual: whether the money is received or not BUT is depended whether the
services was provided or compounded and expenses are recorded when they are
incurred / paid or not!!
Almost always used when there is inventory!
Calendar year: accounting year encompassing 12 mo. That ends on Dec 31.
Fiscal year: an accounting year that encompasses 12mo that ends on any other date
other than dec 31.
AUDIT Fin. Statem.: a test provided by an outsided accountant, that sais that the
income state. And balance sheet. Represent fairly the operation of the business.
REVIEW statement: we are not swearing to this numbers and giving same level of
insurance as audit, but makes us confident that the numbers in business makes us
confident that…. It is given when an audit is not neceserally provided
COMPILATION fin. Stat.: no verification of any kind or dued diligence has been
performed. ‘’they just copy paste numbers… no verification of the numbers…’’
**Related party: anyone that is related and to determen the transaction between
those parties if they are fair and reasonable/ARMS LENGTH