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Chapter 1 The Accountancy Profession

This document discusses the accounting profession and provides definitions and descriptions of key accounting concepts, standards, and organizations. It covers the overall objective of accounting, components of the accounting process, and limitations on the practice of public accountancy according to Philippine law. Major areas of accounting and continuing professional development requirements are also outlined.

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55 views23 pages

Chapter 1 The Accountancy Profession

This document discusses the accounting profession and provides definitions and descriptions of key accounting concepts, standards, and organizations. It covers the overall objective of accounting, components of the accounting process, and limitations on the practice of public accountancy according to Philippine law. Major areas of accounting and continuing professional development requirements are also outlined.

Uploaded by

sehun oh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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CHAPTER 1

THE ACCOUNTANCY PROFESSION


Accounting Standard Council
• Accounting is a service activity.
• The accounting function is to provide
quantitative information, primarily financial in
nature, about economic entities, that is
intended to be useful in making economic
decision.
American Institute of Certifie Public
Accountants
• Accounting is the art of recording, classifying
and summarizing in a significant manner and
in terms of money, transactions and events
which are in part at least of a financial
character and interpreting the results thereof.
American Accounting Association
• Accounting is the process of identifying,
measuring and communicating economic
information to permit informed judgment and
decision by users of the information.
Overall objective of accounting
• The overall objective of accounting is to
provide quantitative financial information
about a business that is useful to statement
users particularly owners and creditors in
making economic decisions.
Important points
• Accounting is about quantitative information.
• The information is likely to be financial in
nature.
• The information should be useful in decision
making.
Components of Accounting
• Identifying – This accounting process is the
recognition or nonrecognition of business
activities as “accountable” events.
• Measuring – This accounting process is the
assigning of peso amounts to the accountable
transactions and events.
• Communicating – is the process of preparing
and distributing accounting reports to potential
users of accounting information.
Accounting as an information
system
• Accounting is an information system that
measures business activities, process
information into reports and communicates
the reports to decision makers.
Republic Act No. 9298
Philippine Accountancy Act of
2004
Board of Accountancy
The Board of Accountancy is the body
authorized by law to promulgate rules and
regulations affecting the practice of the
accountancy profession in the Philippines.
Limitations of the Practice of public
accountancy
• Single practitioners and partnerships for the
practice of public accountancy must be CPAs in
the Philippines
• Minimum of three years of meaningful
experience in any of the three areas of public
practice
• Corporations are not allowed to be registered
for the purpose of practicing public
accountancy
Main Areas of Accounting
• Public Accounting
1. Auditing
2. Taxation
3. Management advisory services
• Private Accounting
• Government Accounting
Continuing Professional Development
• Renewal of CPA license (15 CPD units)
• Accreditation for the practice of the accountancy
profession (120 CPD units)
• Mandatory
EXEMPTION
• CPAs upon reaching the age of 65 are
permanently exempted from the renewal of CPA
license but not for the purpose of accreditation
to practice the accountancy profession.
• Accounting versus Auditing
• Accounting versus Bookkeeping
• Accounting versus Accountancy
• Financial Accounting versus Managerial
Accounting
GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES (GAAP)
• Generally accepted accounting principles
represent the rules, procedures, practice and
standards followed in the preparation and
presentation of the financial statements.
FINANCIAL REPORTING STANDARDS
COUNCIL (FRSC)
• The FRSC is the accounting standard setting
body created by the Professional Regulation
Commission upon recommendation of the
Board of Accountancy to assist the Board of
Accountancy in carrying out its powers and
functions provided under R.A. Act no. 9298.
• The main function is to establish and improve
accounting standards that will be generally
accepted in the Philippines.
Philippine Interpretations Committee

• The role of the PIC is to prepare


interpretations of PFRS for approval by the
FRSC and to provide timely guidance on
financial reporting issues not specifically
addressed in current PFRS.
International Accounting Standards Board

• IASB (International Accounting Standards


Board) replaced IASC (International
Accounting Standards Council).
• IASB is in charge of International Financial
Reporting Standards or IFRS
• The IASB standards- setting process includes in
the correct order research, discussion paper,
exposure draft and accounting standard.
• Philippine Financial Reporting Standards corresponds to
International Financial Reporting Standards
• Philippine Accounting Standards corresponds to
International Accounting Standards
• Philippines Interpretations which correspond to the
interpretations of the IFRIC and the Standing
Interpretations Committee, and interpretations
developed by the Philippine Interpretations committee

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