CHAPTER 1

ACCOUNTANCY PROFESSION
DEFINITION OF ACCOUNTING

• Service Activity
 provides quantitative information
 financial in nature
 useful in making economic decisions

• Art of recording, classifying and summarizing

• process of identifying, measuring and

communicating
ACCOUNTING PROCESS
Identification Measuring Communication
Accounting
Reports

Assign peso amounts Prepare

Select economic accounting reports
events
(transactions) SOFTBYTE
Annual Report

Analyse and interpret

Record, classify, for users
and summarize
ACCOUNTANCY PROFESSION
• R.A. 9298 - Philippine Accountancy Act of 2004
• Board of Accountancy - under the supervision of PRC
 promulgate rules and regulations
 standardize and regulate accounting education
 conduct examinations for registering CPAs
• Sectors:
 Public Practice
 Commerce and Industry
 Government
 Academe
ACCOUNTANCY PROFESSION

• Continuing Professional Development - raises and

enhances the technical skill and competence of the CPA
– requirement for renewal of license and accreditation of CPA
– proposed CPD credit units: 60 - 2016; 80 - 2017; 100 - 2018,
120 - 2019
ACCOUNTING AUDITING BOOKKEEPING

Encompasses auditing and Branch of accounting Branch of Accounting

bookkeeping

Internal Auditing - concerns on involves recording of economic

internal control events and transactions

External Auditor - express mechanical and procedural

opinion on the fairness of FS (recording and record keeping)
FINANCIAL ACCOUNTING MANAGERIAL ACCOUNTING

Financial Statement Managerial Accounting reports

External users Internal Users

Past Transactions Future oriented

Entire Organization segmented information

verifiability, objectivity, precision relevance, flexibility, timeliness

must conform to GAAP need not conform to GAAP

GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES
• encompass conventions, rules and procedures necessary
to define accepted accounting practice at a particular time
FINANCIAL REPORTING STANDARDS COUNCIL
• successor of ASC
• to establish GAAP in the Philippines and to assist BOA in
monitoring the conditions affecting the practice of
accountancy.
• composed of 15 members with a chairman
INTERNATIONAL ACCOUNTING INTERNATIONAL ACCOUNTING
STANDARDS COUNCIL (IASC) STANDARDS BOARD (IASB)

Independent private sector body replaces IASC

approved statement: International approved statement: International Financial

Accounting Standards (IAS) Reporting Standards (IFRS)

FRSC's PRONOUNCEMENT
PFRS corresponds with IFRS

PAS corresponds with IAS

PIC (Philippine Interpretation Committee) corresponds with IFRIC (International

Financial Reporting Interpretation
Committee)

corresponds with SIC (Standing

Interpretation Committee)