Thomas A Lee is Professor Emeritus of Accountancy at the University of Alabama and currently holds Honorary Professorships at the Universities of Dundee, Newcastle-upon-Tyne, and St Andrews.  Previous full-time professorships were held at the Universities of Liverpool and Edinburgh.  He has an MSc and DLitt from the University of Strathclyde and is a member of the Institute of Chartered Accountants of Scotland, the Institute of Taxation, the American Accounting Association, and the British Accounting Association.  Professor Lee has published numerous teaching and research books, and research and professional papers and other contributions.  He is a member of several editorial boards of leading research journals, and has an international reputation in financial reporting, auditing, accounting history, and accounting professionalization.  He has won numerous awards for his published work and is frequently cited as one of the most published accounting researchers world-wide.  He received the British Accounting Association’s Lifetime Achievement Award in 2005 and is listed in publications such as Who’s Who in America and Who’s Who in the World.

"A major strength of Thomas Lee's book comes from the clear presentation of the main financial accounting issues." (International Journal of Accounting, April 2008)

• Lessons xiGlossary of Terms xvAbout the Author xviiAbout the Book xixAcknowledgments xxiChapter 1 Corporate Financial Reporting 1Learning Objectives 1Introduction 1Illustration 1 Good News at Flash Bang Wallop plc 1Bad News at Flash Bang Wallop plc 2Financial Play with Actors and Plot 3Lessons to be Learnt 3Companies 4Corporate Managers 6Corporate Governors 7Corporate Financial Statements 8Accounting Numbers 9Creative Accounting 10Corporate Auditing 11Problems for Public Accountants 12Financial Statement Users 13General Purpose Financial Information 14General Legal Requirements in UK 14Learning Objectives 16Exercises 1–6 17Additional Reading 19Chapter 2 Corporate Governance 20Learning Objectives 20Introduction 20Defining Corporate Governance 21Accountability or Stewardship 21Legislative Developments in Corporate Governance 22Non-accounting Regulations in Corporate Governance 24Accounting Regulations in Corporate Governance 25Auditing and Corporate Governance 27Other Corporate Governance Developments 29Audit Committees 33Ineffective Audit Committees 34US Developments in Corporate Governance 35Internal Control and Internal Audit 38Learning Objectives 40Exercises 1–8 40Additional Reading 42Chapter 3 Corporate Financial Accounting 43Learning Objectives 43Introduction 43Comprehensive Package 44Investment Decisions 47Illustration 2 What-a-Picture Ltd 50Share Capital 52Long-term Lending Decisions 53Illustration 3 Down-the-Plughole Ltd 55Other Decisions 56Overview of Information Needs 57Time and Corporate Financial Reports 58Accounting Numbers 59Illustration 4 Rambling-Sid-Deli Ltd 60Accounting Costs and Fair Values 61Illustration 5 Balance Sheet Numbers 62Accounting Conventions 63Legal and Regulatory Requirements 67Learning Objectives 70Exercises 1–5 70Additional Reading 71Chapter 4 Corporate Profit Statement 73Learning Objectives 73Introduction 73Balance Sheet or Profit Statement Approach 74The Profit Statement 74Importance of Profit Statement 78Earnings Per Share 79Basic Relationship and Conventions 81Illustration 6 Jam-Today Ltd 81Basic Elements of Profit Statement 82Illustration 7 Give-Me-A-Break Ltd 84Exceptional Events and Transactions 90Other Profit Statement Matters 91Creative Accounting 93Corporate Governance and Profit Statement 96Other Legislative and Regulative Requirements 96Learning Objectives 99Exercises 1–8 99Additional Reading 101Chapter 5 Corporate Cash Flow Statement 103Learning Objectives 103Introduction 103Illustration 8 Would-You-Believe-It Ltd 105Solvency, Liquidity, Cash Flow, and Profitability 108Illustration 9 Had-Enough Ltd 110Illustration 10 Profitability, Liquidity, and Solvency 112Illustration 11 Accounting Profit, Working Capital, and Operating Cash Flow 114Cash Flow Reporting 114Disclosure of Cash Flow Statements 118Issues with Cash Flow Statements 120Corporate Governance and Cash Flow Statements 122Legislative and Regulatory Requirements 122Learning Objectives 122Exercises 1–6 123Additional Reading 123Chapter 6 Corporate Balance Sheet 125Learning Objectives 125Introduction 125Basic Accounting Relationship 128Illustration 12 Jim Jones Insurance Ltd 129Balance Sheet Elements 130Balance Sheet Numbers 132Basic Balance Sheet 134Illustration 13 Runalot Sports Ltd 134Other Balance Sheet Matters 141Issues in Balance Sheet Reporting 148Creative Accounting 151Corporate Governance and Balance Sheets 154Other Legal and Regulatory Requirements 155Learning Objectives 156Exercises 1–7 157Additional Reading 159Chapter 7 Other Corporate Statements 161Learning Objectives 161Introduction 161Secondary Financial Statements 162Statements from Board and Others 168Chairman’s Report 168Report of Board of Directors 170Operating and Financial Review 176Other Statements and Corporate Governance 178Legislative and Regulatory Requirements 179Learning Objectives 180Exercises 1–8 180Additional Reading 184Chapter 8 Corporate Auditing 185Learning Objectives 185Introduction 185Corporate Audit Report 186Illustration 14 Test, Tick, & Attest, Registered Auditors 186Nature and Purpose of Corporate Audit 190Feasibility of Corporate Auditing 194Independent and Competent Auditors 196Corporate Auditor’s Duty of Care 198Responsible for What and to Whom? 199Corporate Auditing and Fraud Detection 200Audit Evidence 203Corporate Auditing and Corporate Governance 204Audit Expectations Gap 204Legal and Regulatory Provisions for Corporate Auditing 205Learning Objectives 208Exercises 1–8 208Additional Reading 210Chapter 9 Creative Accounting 213Learning Objectives 213Introduction 213Preliminary Definitions 214Nature and Purpose of Creative Accounting 215Acceptable Accounting Practice 216Flexibility of Accounting 218Creative Accounting in Practice 219Creative Accounting and Reporting Issues 230Creative Accounting and Corporate Governance 233Learning Objectives 234Exercises 1–6 234Additional Reading 236Chapter 10 Corporate Financial Statement Analysis 238Learning Objectives 238Common-size Analysis 239Comparisons of Accounting Numbers 241Nature and Purpose of Financial Ratios 246Financial Ratio Criteria 249Financial Ratio Limitations 250Computation and Interpretation of Financial Ratios 252Financial Ratios and Profitability 253Financial Ratios and Liquidity and Cash Flow 257Illustration 15 Just-In-Case Ltd and On-the-Button Ltd 268Financial Ratios, Structure, and Performance 270Learning Objectives 275Exercises 1–11 275Additional Reading 279Index 280

Thomas A Lee is Professor Emeritus of Accountancy at the University of Alabama and currently holds Honorary Professorships at the Universities of Dundee, Newcastle-upon-Tyne, and St Andrews.  Previous full-time professorships were held at the Universities of Liverpool and Edinburgh.  He has an MSc and DLitt from the University of Strathclyde and is a member of the Institute of Chartered Accountants of Scotland, the Institute of Taxation, the American Accounting Association, and the British Accounting Association.  Professor Lee has published numerous teaching and research books, and research and professional papers and other contributions.  He is a member of several editorial boards of leading research journals, and has an international reputation in financial reporting, auditing, accounting history, and accounting professionalization.  He has won numerous awards for his published work and is frequently cited as one of the most published accounting researchers world-wide.  He received the British Accounting Association’s Lifetime Achievement Award in 2005 and is listed in publications such as Who’s Who in America and Who’s Who in the World.

"A major strength of Thomas Lee's book comes from the clear presentation of the main financial accounting issues." (International Journal of Accounting, April 2008)

• Lessons xiGlossary of Terms xvAbout the Author xviiAbout the Book xixAcknowledgments xxiChapter 1 Corporate Financial Reporting 1Learning Objectives 1Introduction 1Illustration 1 Good News at Flash Bang Wallop plc 1Bad News at Flash Bang Wallop plc 2Financial Play with Actors and Plot 3Lessons to be Learnt 3Companies 4Corporate Managers 6Corporate Governors 7Corporate Financial Statements 8Accounting Numbers 9Creative Accounting 10Corporate Auditing 11Problems for Public Accountants 12Financial Statement Users 13General Purpose Financial Information 14General Legal Requirements in UK 14Learning Objectives 16Exercises 1–6 17Additional Reading 19Chapter 2 Corporate Governance 20Learning Objectives 20Introduction 20Defining Corporate Governance 21Accountability or Stewardship 21Legislative Developments in Corporate Governance 22Non-accounting Regulations in Corporate Governance 24Accounting Regulations in Corporate Governance 25Auditing and Corporate Governance 27Other Corporate Governance Developments 29Audit Committees 33Ineffective Audit Committees 34US Developments in Corporate Governance 35Internal Control and Internal Audit 38Learning Objectives 40Exercises 1–8 40Additional Reading 42Chapter 3 Corporate Financial Accounting 43Learning Objectives 43Introduction 43Comprehensive Package 44Investment Decisions 47Illustration 2 What-a-Picture Ltd 50Share Capital 52Long-term Lending Decisions 53Illustration 3 Down-the-Plughole Ltd 55Other Decisions 56Overview of Information Needs 57Time and Corporate Financial Reports 58Accounting Numbers 59Illustration 4 Rambling-Sid-Deli Ltd 60Accounting Costs and Fair Values 61Illustration 5 Balance Sheet Numbers 62Accounting Conventions 63Legal and Regulatory Requirements 67Learning Objectives 70Exercises 1–5 70Additional Reading 71Chapter 4 Corporate Profit Statement 73Learning Objectives 73Introduction 73Balance Sheet or Profit Statement Approach 74The Profit Statement 74Importance of Profit Statement 78Earnings Per Share 79Basic Relationship and Conventions 81Illustration 6 Jam-Today Ltd 81Basic Elements of Profit Statement 82Illustration 7 Give-Me-A-Break Ltd 84Exceptional Events and Transactions 90Other Profit Statement Matters 91Creative Accounting 93Corporate Governance and Profit Statement 96Other Legislative and Regulative Requirements 96Learning Objectives 99Exercises 1–8 99Additional Reading 101Chapter 5 Corporate Cash Flow Statement 103Learning Objectives 103Introduction 103Illustration 8 Would-You-Believe-It Ltd 105Solvency, Liquidity, Cash Flow, and Profitability 108Illustration 9 Had-Enough Ltd 110Illustration 10 Profitability, Liquidity, and Solvency 112Illustration 11 Accounting Profit, Working Capital, and Operating Cash Flow 114Cash Flow Reporting 114Disclosure of Cash Flow Statements 118Issues with Cash Flow Statements 120Corporate Governance and Cash Flow Statements 122Legislative and Regulatory Requirements 122Learning Objectives 122Exercises 1–6 123Additional Reading 123Chapter 6 Corporate Balance Sheet 125Learning Objectives 125Introduction 125Basic Accounting Relationship 128Illustration 12 Jim Jones Insurance Ltd 129Balance Sheet Elements 130Balance Sheet Numbers 132Basic Balance Sheet 134Illustration 13 Runalot Sports Ltd 134Other Balance Sheet Matters 141Issues in Balance Sheet Reporting 148Creative Accounting 151Corporate Governance and Balance Sheets 154Other Legal and Regulatory Requirements 155Learning Objectives 156Exercises 1–7 157Additional Reading 159Chapter 7 Other Corporate Statements 161Learning Objectives 161Introduction 161Secondary Financial Statements 162Statements from Board and Others 168Chairman’s Report 168Report of Board of Directors 170Operating and Financial Review 176Other Statements and Corporate Governance 178Legislative and Regulatory Requirements 179Learning Objectives 180Exercises 1–8 180Additional Reading 184Chapter 8 Corporate Auditing 185Learning Objectives 185Introduction 185Corporate Audit Report 186Illustration 14 Test, Tick, & Attest, Registered Auditors 186Nature and Purpose of Corporate Audit 190Feasibility of Corporate Auditing 194Independent and Competent Auditors 196Corporate Auditor’s Duty of Care 198Responsible for What and to Whom? 199Corporate Auditing and Fraud Detection 200Audit Evidence 203Corporate Auditing and Corporate Governance 204Audit Expectations Gap 204Legal and Regulatory Provisions for Corporate Auditing 205Learning Objectives 208Exercises 1–8 208Additional Reading 210Chapter 9 Creative Accounting 213Learning Objectives 213Introduction 213Preliminary Definitions 214Nature and Purpose of Creative Accounting 215Acceptable Accounting Practice 216Flexibility of Accounting 218Creative Accounting in Practice 219Creative Accounting and Reporting Issues 230Creative Accounting and Corporate Governance 233Learning Objectives 234Exercises 1–6 234Additional Reading 236Chapter 10 Corporate Financial Statement Analysis 238Learning Objectives 238Common-size Analysis 239Comparisons of Accounting Numbers 241Nature and Purpose of Financial Ratios 246Financial Ratio Criteria 249Financial Ratio Limitations 250Computation and Interpretation of Financial Ratios 252Financial Ratios and Profitability 253Financial Ratios and Liquidity and Cash Flow 257Illustration 15 Just-In-Case Ltd and On-the-Button Ltd 268Financial Ratios, Structure, and Performance 270Learning Objectives 275Exercises 1–11 275Additional Reading 279Index 280

Thomas A Lee is Professor Emeritus of Accountancy at the University of Alabama and currently holds Honorary Professorships at the Universities of Dundee, Newcastle-upon-Tyne, and St Andrews.  Previous full-time professorships were held at the Universities of Liverpool and Edinburgh.  He has an MSc and DLitt from the University of Strathclyde and is a member of the Institute of Chartered Accountants of Scotland, the Institute of Taxation, the American Accounting Association, and the British Accounting Association.  Professor Lee has published numerous teaching and research books, and research and professional papers and other contributions.  He is a member of several editorial boards of leading research journals, and has an international reputation in financial reporting, auditing, accounting history, and accounting professionalization.  He has won numerous awards for his published work and is frequently cited as one of the most published accounting researchers world-wide.  He received the British Accounting Association’s Lifetime Achievement Award in 2005 and is listed in publications such as Who’s Who in America and Who’s Who in the World.

"A major strength of Thomas Lee's book comes from the clear presentation of the main financial accounting issues." (International Journal of Accounting, April 2008)

• Lessons xiGlossary of Terms xvAbout the Author xviiAbout the Book xixAcknowledgments xxiChapter 1 Corporate Financial Reporting 1Learning Objectives 1Introduction 1Illustration 1 Good News at Flash Bang Wallop plc 1Bad News at Flash Bang Wallop plc 2Financial Play with Actors and Plot 3Lessons to be Learnt 3Companies 4Corporate Managers 6Corporate Governors 7Corporate Financial Statements 8Accounting Numbers 9Creative Accounting 10Corporate Auditing 11Problems for Public Accountants 12Financial Statement Users 13General Purpose Financial Information 14General Legal Requirements in UK 14Learning Objectives 16Exercises 1–6 17Additional Reading 19Chapter 2 Corporate Governance 20Learning Objectives 20Introduction 20Defining Corporate Governance 21Accountability or Stewardship 21Legislative Developments in Corporate Governance 22Non-accounting Regulations in Corporate Governance 24Accounting Regulations in Corporate Governance 25Auditing and Corporate Governance 27Other Corporate Governance Developments 29Audit Committees 33Ineffective Audit Committees 34US Developments in Corporate Governance 35Internal Control and Internal Audit 38Learning Objectives 40Exercises 1–8 40Additional Reading 42Chapter 3 Corporate Financial Accounting 43Learning Objectives 43Introduction 43Comprehensive Package 44Investment Decisions 47Illustration 2 What-a-Picture Ltd 50Share Capital 52Long-term Lending Decisions 53Illustration 3 Down-the-Plughole Ltd 55Other Decisions 56Overview of Information Needs 57Time and Corporate Financial Reports 58Accounting Numbers 59Illustration 4 Rambling-Sid-Deli Ltd 60Accounting Costs and Fair Values 61Illustration 5 Balance Sheet Numbers 62Accounting Conventions 63Legal and Regulatory Requirements 67Learning Objectives 70Exercises 1–5 70Additional Reading 71Chapter 4 Corporate Profit Statement 73Learning Objectives 73Introduction 73Balance Sheet or Profit Statement Approach 74The Profit Statement 74Importance of Profit Statement 78Earnings Per Share 79Basic Relationship and Conventions 81Illustration 6 Jam-Today Ltd 81Basic Elements of Profit Statement 82Illustration 7 Give-Me-A-Break Ltd 84Exceptional Events and Transactions 90Other Profit Statement Matters 91Creative Accounting 93Corporate Governance and Profit Statement 96Other Legislative and Regulative Requirements 96Learning Objectives 99Exercises 1–8 99Additional Reading 101Chapter 5 Corporate Cash Flow Statement 103Learning Objectives 103Introduction 103Illustration 8 Would-You-Believe-It Ltd 105Solvency, Liquidity, Cash Flow, and Profitability 108Illustration 9 Had-Enough Ltd 110Illustration 10 Profitability, Liquidity, and Solvency 112Illustration 11 Accounting Profit, Working Capital, and Operating Cash Flow 114Cash Flow Reporting 114Disclosure of Cash Flow Statements 118Issues with Cash Flow Statements 120Corporate Governance and Cash Flow Statements 122Legislative and Regulatory Requirements 122Learning Objectives 122Exercises 1–6 123Additional Reading 123Chapter 6 Corporate Balance Sheet 125Learning Objectives 125Introduction 125Basic Accounting Relationship 128Illustration 12 Jim Jones Insurance Ltd 129Balance Sheet Elements 130Balance Sheet Numbers 132Basic Balance Sheet 134Illustration 13 Runalot Sports Ltd 134Other Balance Sheet Matters 141Issues in Balance Sheet Reporting 148Creative Accounting 151Corporate Governance and Balance Sheets 154Other Legal and Regulatory Requirements 155Learning Objectives 156Exercises 1–7 157Additional Reading 159Chapter 7 Other Corporate Statements 161Learning Objectives 161Introduction 161Secondary Financial Statements 162Statements from Board and Others 168Chairman’s Report 168Report of Board of Directors 170Operating and Financial Review 176Other Statements and Corporate Governance 178Legislative and Regulatory Requirements 179Learning Objectives 180Exercises 1–8 180Additional Reading 184Chapter 8 Corporate Auditing 185Learning Objectives 185Introduction 185Corporate Audit Report 186Illustration 14 Test, Tick, & Attest, Registered Auditors 186Nature and Purpose of Corporate Audit 190Feasibility of Corporate Auditing 194Independent and Competent Auditors 196Corporate Auditor’s Duty of Care 198Responsible for What and to Whom? 199Corporate Auditing and Fraud Detection 200Audit Evidence 203Corporate Auditing and Corporate Governance 204Audit Expectations Gap 204Legal and Regulatory Provisions for Corporate Auditing 205Learning Objectives 208Exercises 1–8 208Additional Reading 210Chapter 9 Creative Accounting 213Learning Objectives 213Introduction 213Preliminary Definitions 214Nature and Purpose of Creative Accounting 215Acceptable Accounting Practice 216Flexibility of Accounting 218Creative Accounting in Practice 219Creative Accounting and Reporting Issues 230Creative Accounting and Corporate Governance 233Learning Objectives 234Exercises 1–6 234Additional Reading 236Chapter 10 Corporate Financial Statement Analysis 238Learning Objectives 238Common-size Analysis 239Comparisons of Accounting Numbers 241Nature and Purpose of Financial Ratios 246Financial Ratio Criteria 249Financial Ratio Limitations 250Computation and Interpretation of Financial Ratios 252Financial Ratios and Profitability 253Financial Ratios and Liquidity and Cash Flow 257Illustration 15 Just-In-Case Ltd and On-the-Button Ltd 268Financial Ratios, Structure, and Performance 270Learning Objectives 275Exercises 1–11 275Additional Reading 279Index 280