ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 5: Accounting Principles (5038)

Submission date 09/10/2023 Date Received 1st submission 09/10/2023

Re-submission Date Date Received 2nd submission

Student Name Nguyen Thi Thanh Lan Student ID BH00971

Class MA06203 Assessor name Hoang My Linh

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that
making a false declaration is a form of malpractice.

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TABLE OF CONTENTS
I. INTRODUCTION ....................................................................................................................... 4

1.1 General introduction to Blog ............................................................................................. 4

2.2 Objectives and main content of the blog............................................................................ 4

II. THE ROLE OF ACCOUNTING IN THE ORGANIZATION .................................................. 5

2.1 Accounting concepts and the general role of accounting in businesses ............................ 5

2.1.1 Definition of accounting .......................................................................................... 5

2.1.2 General role of accounting in businesses ................................................................ 6

2.2 Different types of accounting and main users of accounting information ......................... 7

2.2.1 Different types of accounting .................................................................................. 7

2.2.2 Main users of accounting information ..................................................................... 8

2.3 Interrelationships between the accounting function and other functions to meet the needs
and expectations of the organization, its stakeholders and society ........................................ 10

2.4 Career opportunities in accounting .................................................................................. 11

2.5 Necessary skills and abilities for accounting positions.................................................... 13

2.5.1 Requirements for the accounting industry ............................................................. 13

2.5.2 CGMA Competency Framework (2019 version) .................................................. 14

III. THE CONTEXT AND PURPOSE OF FINANCIAL AND MANAGEMENT

ACCOUNTING ............................................................................................................................ 16

3.1 The role and importance of accounting as an information system .................................. 16

3.2 Distinguish between financial accounting and management accounting ........................ 18

3.3 Organizational limitations and threats according to accounting regulatory concepts

(GAAP, IFRS from FASB) and accounting principles and ethics ......................................... 20

IV. CONCLUSION ....................................................................................................................... 22

V. REFERENCE ........................................................................................................................... 23

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I. INTRODUCTION

1.1 General introduction to Blog

In today's market economy conditions, with economic accounting mechanisms business

and fierce competition from many economic sectors to survive in the long run For sustainable
development, production and business units must ensure autonomy in production and business
activities and operate profitably . Fulfilling that requirement requires the Business managers need
to capture timely and accurate information, thereby serving as a basis for making the most effective
business decisions. Besides, a business cannot lack accounting information, an important part
important and necessary for managers. Any manager in any any business from a large corporation
to a family-run store must rely on accounting information to manage, operate, control and make
decisions economic determination. Accounting work is important and practical. One of the long-
term measures to improve the efficiency of production and business activities of the enterprise.
And the blog article below will help businesses better understand and have a deeper look at the
importance of accounting.

2.2 Objectives and main content of the blog

The article below is an article about the role of accounting in an organization, providing
information about the importance of accounting for businesses.

This blog post first outlines the role of accounting through concepts, general roles, different
types of accounting, main users of accounting information, and the interrelationship between the
accounting function and accounting function. Other functions to meet the needs and expectations
of the organization, stakeholders and society, career opportunities in the accounting field, as well
as the skills and competencies required for accounting positions . Next, the article will analyze the
context and purposes of financial accounting and management accounting. State the role and
importance of accounting as an information system. Distinguish between financial accounting and
management accounting. Analyze organizational constraints and threats according to accounting
regulatory concepts (GAAP, IFRS from FASB) as well as accounting principles and ethics.

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II. THE ROLE OF ACCOUNTING IN THE ORGANIZATION

2.1 Accounting concepts and the general role of accounting in businesses

2.1.1 Definition of accounting

Accounting is the process of recording financial transactions related to a business. The

accounting process includes summarizing, analyzing and reporting these transactions to
supervisory agencies, regulators and tax collection agencies (Fernando, 2023). Financial
statements used in accounting are concise summaries of financial transactions during an
accounting period, summarizing a company's operations, financial position, and cash flows . over
a specific period of time are concise and consolidated reports based on thousands of individual
financial transactions. There are also many authors who have introduced the concept of
accounting from many different aspects. According to Robert Anthhony, PhD from Harvard
University: "Accounting is the language of business”(Le, 2018). According International
Auditing Practices Committee (IAPC): “Accounting is a series of tasks in an enterprise through
which transactions are processed as a means of maintaining financial records. ” According to the
International Federation of Accountants (IFAC): “Accounting is the art of recording, classifying,
synthesizing in a particular way, in terms of money, transactions and events of a financial nature
and explaining its results”.

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2.1.2 General role of accounting in businesses

The functions of accounting include selecting transactions and events, identifying

business activities, entering, measuring and classifying as well as recording business activities,
preparing, analyzing and interpreting. for communicating business activities. For example, A
business uses accounting information to evaluate its performance. They see that revenue is
growing, but profits are falling. From there, they decided to cut costs to increase profits. Or An
investor uses accounting information to evaluate a company before investing. They saw that the
company had stable revenue and profits, so they decided to invest in the company. Therefore, we
can say that the most basic purpose of accounting is to provide information about the financial
situation of an organization to those who have to make decisions to run that organization's
activities . As an indispensable part of every business, the information provided by the accounting
department is essential for administrators, it will help businesses make business strategies and
decisions. Because if accounting information is incorrect, it will easily lead to wrong decisions by
administrators. Through the accounting department, managers can regularly monitor the
production and business activities of the enterprise from production, market monitoring or internal
control. From there, provide appropriate assessments and directions for businesses in the future.

Accounting creates the financial history for any company. It is used to track spending
from business activities as well as company profits. It can also be used to predict a company's
financial success and future needs to create budgets and take advantage of new growth
opportunities. Accountants use this information to prepare financial reports used by business
professionals and government officials (Career development 2022).

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2.2 Different types of accounting and main users of accounting information

2.2.1 Different types of accounting

The term accountant refers to a professional who performs accounting functions such as
account analysis, auditing or financial statement analysis. Accountants work with accounting firms
or the internal accounting departments of large companies. They can also set up their own personal
activities. After meeting specific state education and testing requirements, these professionals are
certified by national professional associations (Kagan, 2023). Accounting plays a very important
and indispensable role in the operation and development of every business. Depending on each
business, accountants will be responsible for different tasks.

For example, classification by purpose : Accounting is divided into two main categories:
financial accounting and management accounting.

Financial accounting is a specific branch of accounting that deals with the process of
recording, summarizing and reporting a multitude of transactions arising from business activities
over a period of time. These transactions are summarized in the preparation of financial
statements - including the balance sheet, income statement and cash flow statement - which record
the company's performance in one certain period of time (Kenton, 2023).

Management accounting is the process of preparing reports on business activities that help
managers make short- and long-term decisions. It helps businesses pursue their goals by identifying,
measuring, analyzing, interpreting and communicating information to managers. Physical (What is
management accounting 2023)

Classified by content : Payment accountant: responsible for implementing income and

expenditure documents in the company when there is a need to pay in cash or transfer. Bank
accountant: this position is responsible for income; records; Processing and analyzing economic
operations; finance and provide necessary information to serve the management of monetary
activities at banks; providing information to organizations; individuals according to regulations.
Debt accounting: This is a fairly important part of accounting related to the business's receivable
and payable debts. Warehouse accountant: This is an accounting position working at a warehouse;
raw materials in the enterprise. They are responsible for preparing invoices and documents and
tracking details of goods in the warehouse; including the import and export situation; inventory;
reconcile invoices; book documents…

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 In addition, accountants also classify according to the content of indicators representing
specific accounting objects in accounts such as general accounts and detailed accounts. By
business field: Production accounting, commercial accounting,...

2.2.2 Main users of accounting information

Accounting information plays an important role in the decision making of these groups.
By providing information about a business's financial situation, accounting information helps these
groups make informed and beneficial decisions for themselves. Below is a description of the main
groups that use accounting information

Owners are the people who own the business and have a financial interest in the success of the
business. They use accounting information to evaluate business performance and decide on further
investments.

Managers are the people responsible for running the business. They use accounting information
to plan, control, and make business decisions.

Lenders use Accounting information helps lenders determine a business's profitability:

Information about revenue, costs and profits helps lenders evaluate a business's profitability.
Information about assets, liabilities and equity helps lenders evaluate a business's financial

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situation. And the solvency of the business. Based on these factors, the lender will make a decision
on whether to lend or not, as well as the interest rate and loan conditions.

Suppliers are people who sell goods or services to a business. They use accounting information
to evaluate a business's ability to pay and decide to continue providing goods or services.

Customers are people who buy goods or services from a business. They use accounting
information to evaluate a business's ability to provide goods or services and make purchasing
decisions.

Competitors use accounting information to evaluate their competitors' strengths and weaknesses.
Accounting information helps competitors determine factors such as: Competitor's profitability ;
Financial situation of competitors; Competitor's business strategy to make decisions about how to
compete with competitors.

Employees are people who work for the business. They use accounting information to evaluate
business performance and negotiate salaries and benefits.

Government The government uses accounting information to evaluate the economic situation
because accounting information helps the government evaluate the country's economic situation,
including factors such as GDP, unemployment, etc. industry and inflation ; Planning and
budgeting; Public financial management ; Check business operations including compliance with
regulations and laws.

Investment Analyst Investment analysts use accounting information to make investment

decisions. Determine the profit potential of the business, the financial situation of the business,
and the risks of the business

Community representatives is the people living around the business. They use accounting
information to evaluate a business's impact on the community.

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 Users of accounting information have close relationships with each other. Accounting
information is used by internal users to make business decisions. Decisions made by internal users
can impact the financial situation of the enterprise, which in turn affects external users. The image
above shows a diagram of the main users of accounting information, including external users and
internal users. External users are people who are not part of the business, including lenders,
shareholders, governments, consumer groups, external audiences, and customers. Lenders use
accounting information to evaluate a business's ability to repay debt. Shareholders use accounting
information to evaluate the business performance of the enterprise and make investment decisions.
The government uses accounting information to collect taxes, manage the economy and make
policies... Internal users are people who belong to the business, including managers, officers,
internal auditors , sales staff, personnel officers and controllers. In it, managers will use accounting
information to plan, control and make business decisions. Or the salesperson will use accounting
information to plan sales and report revenue.

2.3 Interrelationships between the accounting function and other functions to meet the needs
and expectations of the organization, its stakeholders and society

To manage all business activities in an enterprise effectively, business administrators must

promptly and accurately grasp economic information about their activities, thereby making
decisions. appropriate determination. Accounting as an information system provides useful
information to decision makers. Thus, accounting has the functions of providing information about
the financial situation of the enterprise to decision makers and systematically checking and
supervising the entire process and results of the enterprise's business activities. . The function of
providing information is the basis for inspection and supervision, which will help reflect the
operating situation of the enterprise more accurately, clearly and completely. Accounting

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information is used to make important business decisions, such as investment decisions, loans,
purchases, sales, and business planning and strategy.

The accounting function provides financial information to other functions in the

organization, such as production functions, marketing functions, human resources functions, etc.
This information is used to support other functions. others in making decisions, carrying out
activities and achieving organizational goals. For example, accounting information about sales is
used by the marketing function to identify target markets and develop marketing strategies.
Accounting information about human resources costs is used by the human resources function to
develop compensation policies and recruit talent. In contrast, other functions also provide
information for the accounting function, such as information about production activities, market
information and human resources information. This information is used by the accounting function
to prepare financial reports and provide accurate and timely information to stakeholders. The
interrelationship between the accounting function and other functions within the organization is
essential to ensure that accounting information is provided accurately, completely and promptly,
meeting the needs and demands of the organization. expectations of stakeholders and society and
meet the needs and expectations of stakeholders and society. Specifically, this relationship helps
ensure the accuracy, completeness and timeliness of accounting information, providing necessary
information for accountants to prepare financial reports and other accounting reports, ensuring that
accounting information is provided accurately, completely and promptly, meeting the needs and
expectations of stakeholders and society. Besides, improving the operational efficiency of the
organization, building trust with stakeholders and society . Close relationships between the
accounting function and other functions help ensure that accounting information is provided in a
transparent and honest manner, thereby building trust with stakeholders and society.

2.4 Career opportunities in accounting

Job opportunities in the accounting industry are very open. According to some surveys,
accounting jobs are forecast to continue to increase in the next 10 years due to the constantly
increasing need to handle issues related to corporate finance. With a growth rate of about 10%, the
demand for accounting staff is even higher than the average growth rate of many other occupations.
According to statistics by the end of 2020, Vietnam has more than 810,000 operating businesses.
Each average business needs 5-6 accountants to maintain operations with an average income of 7-
9 million VND/person. And according to TTO - A new resolution on business development in the
period 2021 - 2025, vision 2030 has just been assigned by the Government to the Ministry of
Planning and Investment to preside over the construction, Vietnam aims to have 1.3 - 1.5 million

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enterprise. That means that the demand for accounting recruitment will also increase (Ly, 2023).
This is due to the development of the economy and international economic integration, leading to
an increase in the number of businesses and organizations needing accounting services.

Job opportunities in
accounting are widely distributed in
many fields such as businesses, non-
profit organizations, and state
agencies. First, in terms of
businesses, this is the field with the
greatest need for accounting
recruitment. Businesses of all sizes and industries need accountants to perform tasks related to
finance and accounting. Second, Non-profit organizations such as charities, social organizations,...
also need accountants to manage the organization's finances and assets. Next, state agencies such
as the Ministry of Finance, Ministry of Planning and Investment,... also have a need to recruit
accountants to perform work related to public finance. And moreover, job opportunities in
accounting are widely distributed at many levels, for example employee, chief auditor, finance
director. Accountants are responsible for performing basic accounting tasks such as recording,
classifying, summarizing and preparing financial reports. The Chief Accountant manages and
operates the accounting department, ensuring the business's accounting system operates
effectively. Or financial director, a senior management position in a business, responsible for all
financial activities of the business.

This table provides an overview of the types of accounting services that businesses can use
as well as career opportunities in the accounting industry. In particular, services are provided to
business managers to assist them in decision making and planning including general accounting
providing information on the financial situation of the business, accounting Cost accounting
provides information about production and business costs of businesses, analytical accounting

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analyzes accounting information to support managers in decision making. Or are services provided
to stakeholders external to the business, including shareholders, banks, suppliers and tax
authorities including preparing financial statements, preparing financial reports according to legal
regulations, financial statement audits, tax consulting, etc. Choosing the appropriate type of
accounting service depends on the needs of the business to find suitable candidates for the
vacancies.

2.5 Necessary skills and abilities for accounting positions

2.5.1 Requirements for the accounting industry

Lucia Smeal, an adjunct lecturer at Franklin College, said she sees the role of accountants
expanding significantly: “Accountants must think strategically, drive business value and be
proactive in business decisions". Accounting is a profession that requires attention to detail. The
work of the accounting profession requires carefulness and thoroughness, including tasks such as
preparing documents about daily economic activities arising at the unit: Sales invoices, warehouse
delivery notes, import notes. warehouse,… Analyze the company's financial situation, budget,
costs and revenue. Record and check accounting books. Manage cash at the unit and accounts
bank. Process accounting data, prepare reports on the unit's performance to provide information to
managers such as: Financial reports, Profit reports, Cost reports,... (Ngoc, 2022).

Accountants need to meet the requirements for professional knowledge, professional skills
and professional ethics. Regarding professional knowledge, this is a solid foundation for
accountants to be able to perform accounting operations accurately, completely and promptly.
Accountants need to master accounting principles and standards. , finance. Regarding professional
skills, accountants need to be able to perform accounting operations accurately, completely and
promptly. And in terms of professional ethics, accountants need to have qualities of honesty,
integrity, and a sense of compliance with the law. In addition, accountants also need to have soft
skills such as: communication to help accountants convey financial information clearly and easily
to relevant audiences. with other departments in the business to complete work effectively, solve
problems to prepare for timely handling of arising problems, limit damage to the business, and
other skills such as time management, being able to withstand pressure, etc. These requirements
help accountants perform their work effectively, meeting the needs of business and society.

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2.5.2 CGMA Competency Framework (2019 version)

From the point of view of psychologists, capacity is the sum of the psychological
characteristics and attributes of an individual. They are suitable for the specific requirements of a
certain activity. To ensure that activities are highly effective. The CGMA competency framework
is an international standard for accounting competencies recognized by businesses and
organizations around the world. Meeting the requirements of the CGMA competency framework
will help accountants improve their professional capacity, soft skills and have opportunities for
career advancement. The CGMA Competency Framework (2019 edition) is designed to help
management accountants, finance professionals and their employers understand knowledge
requirements and assess the skills needed for both current role and desired role. This framework
is underpinned by the need for objectivity, integrity and ethical behavior. Competency-based
training and competency -based human resource management are becoming mainstream and have
proven quality. Human resources are increasingly improved. The professional competency
framework is an effective measurement tool, helping government agencies, businesses, training
institutions, learners, and workers understand what needs to be done and how to achieve the
desired goals. . In other words, the competency framework helps translate an organization's
strategy, goals and values into specific behaviors. Understand the value of the competency
framework for human resource training and human resource management functions The effort will
leverage stakeholder coordination to build the most complete and streamlined capacity framework,
and include an ongoing commitment to acquire new skills and knowledge (CGMA competency
framework 2019 edition 2021).

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 Figure 1 CGMA Competency Framework

The CGMA Competency Framework is designed to help management accountants, finance

professionals and employers understand knowledge requirements and assess the skills needed for
both current and desired roles looking forward to the future. The CGMA Competency Framework
(2019 Version) was developed through three research phases: face-to-face interviews, round tables
and online surveys. Participants were mid- to senior-level financial and non-financial employees,
from a variety of occupations in both the public and private sectors. A total of 130 organizations
from across 14 countries participated in face-to-face interviews. Round tables were held in 20
countries from Asia, Europe, Africa and the Americas. More than 5,000 responses were received
to the online survey, including CIMA members, employers, students, the wider finance community
and academics.

Accordingly, the competency framework for management accounting includes 5

knowledge areas: Technical skills; Business skills; People skills; Leadership skills; Digital skills.
In particular, digital skills, in addition to being an independent field of knowledge, digital skills
also spread across other fields of knowledge. These updates directly reflect the findings of the
three phases of research.

The competency framework includes areas of knowledge and skills, and each of these areas
includes a series of competencies defined at four levels: Basic, Intermediate, Advanced. Senior
and Expert. Each proficiency level will be compatible with the organization's hierarchy.

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Specifically, the basic proficiency level corresponds to employees, the intermediate proficiency
level corresponds to supervisors, the advanced proficiency level corresponds to managers, and the
expert proficiency level corresponds to operator. The importance of technical skills will be high
for employees but decrease as they progress in their careers. For those operating at an advanced
level, technical and professional skills requirements will be lower and there will be more emphasis
on leadership skills (Huong, 2022).

III. THE CONTEXT AND PURPOSE OF FINANCIAL AND MANAGEMENT

ACCOUNTING

3.1 The role and importance of accounting as an information system

Accounting is part of the overall information of the business . Provides necessary

information for decision making, management and business operations . On the management side,
accounting information helps managers evaluate organizational performance, identify potential
opportunities and risks, and make informed business decisions. Legally , ensuring transparency
and accountability of businesses . In terms of investment , used by investors, creditors and other
stakeholders to make decisions about investing, lending or doing business with an enterprise .

Accounting information is an important part of the process that helps us consider different
factors to make accurate resource allocation decisions . Information systems need to collect
information related to goals and objectives of the system. Relevant information is information that
is valuable and useful to users. Then, systematically record the information collected for easy
access and processing and there should be clear processes and procedures in place to ensure that
the information is recorded accurately. accurate and complete. Next, analyze and interpret the
information collected so that users can understand the meaning of the information. And then, report
the information in a way that suits the user's needs. For example, a Customer Management System
collects information about a business's customers. This information includes personal data,
purchase history and customer interaction data. Customer management systems use analytical
tools to classify customers and identify sales opportunities. Information about customers is
reported in reports such as customer analysis reports and performance reports. These
characteristics help ensure that information systems provide accurate and useful information to
users.

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 Figure 2 The accounting information system

Today, with the continuous development of science and technology, the most advanced
technology has been applied to the field of human activities, from production and business to
monitoring and management . Accounting information system (AIS) is the method or structure
that an organization uses to perform the following steps: Collecting, synthesizing, managing,
storing, retrieving and finally reporting Financial and accounting data of that organization or
business. This system can be used by the accounting department, consultants or business analysts
and even the financial director and the board of directors who directly run the business....To be
able to Ensuring the highest percentage of accuracy in each financial transaction as well as the
organization's financial storage operations, further ensuring that financial data is always backed
up and ready to meet the needs of the organization. For use in cases where originals are needed,
accountants must be trained in-depth and methodically before officially working on the AIS
system (Taca, 2022).

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3.2 Distinguish between financial accounting and management accounting

Accounting is often considered to have two distinct branches. It is management accounting

that aims to meet the accounting needs of managers; And financial accounting, seeks to meet the
needs of other users

Differences in their target user groups have caused each segment of accounting to develop
along different lines. Key areas of difference include:

Nature of reports generated. Financial accounting reports tend to be general-purpose. Although

they are primarily aimed at finance providers such as owners and lenders, they contain financial
information that will be useful to a wide range of users and decision-makers. Meanwhile,
management accounting reports often have a specific purpose. They are designed with a specific
decision in mind or for a specific purpose (Atrill & McLaney, 2022).

Objectives The main goal of management accounting is to produce information that is useful for
a company's internal decision making. Business managers gather information for strategic
planning, help management set realistic goals, and encourage effective direction of company
resources. Financial accounting also has some internal applications, but its focus is on informing
people outside the company. The final accounts or financial statements prepared through financial
accounting are designed to reveal the business performance and financial health of the company.
Management accounting is created for corporate executives. Financial accounting is created for
investors, creditors and industry regulators (Ross, 2023).

Level of detail Financial accounting reports tend to be general, concise and general. Information
is simultaneously more transparent and less revealing. This is not the case with management
accounting because there may be reasons to highlight particularly relevant information or even
downplay irrelevant information. For example, you may want to bury lower bonuses in an overall
figure for expenses to avoid angering mid- to low-level employees looking at the report.
Management accounting reports are very detailed, technical, specific and even exploratory in
nature. Companies are always looking for a competitive advantage, so they may examine countless
details that may seem pedantic or confusing to outside parties (Ross 2023).

Regulations Financial accounting reports of many businesses must comply with the provisions of
law and those of accounting regulations makers. These regulations often require that a standard
content and perhaps a standard format be applied. On the other hand, accounting reports are not
subject to regulation and can be designed to meet the needs of specific managers.

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Reporting period . For most businesses, financial accounting reports are produced on an annual
basis, although some large businesses produce semi-annual reports and a few produce quarterly.
Management accounting reports will be prepared regularly at the request of the manager. For
example, a sales manager may need periodic daily, weekly, or monthly sales reports to closely
monitor performance.

Time orientation . Financial accounting reports reflect the operating results and position of a
business over the past period. In essence, they are looking backward. On the other hand,
accounting reports often provide information regarding future performance as well as past
performance.

Scope and quality of information There are two main points worth mentioning. First, financial
accounting reports focus on information that can be quantified in monetary terms. Management
accountants also produce such reports, but are also more likely to produce reports containing
information of a non-financial nature, such as the physical volume of inventory, the number of
orders received okay, number of new products launched, physical output per employee, etc.
Second, financial accounting places more emphasis on using objective, verifiable evidence when
preparing reports. Accounting reports may use less objective and less verifiable information but
still provide managers with the information they need (Atrill & McLaney, 2022).

Below is a table comparing financial accounting and management accounting briefly summarized:

Features Management Accounting Financial Accounting

Objectives The main objectives of financial The main objective of

accounting are to disclose the end managerial accounting is to help
results of the business, and the management by providing
financial condition of the information that is used to plan,
business on a particular date. set goals and evaluate these
goals.

Nature of the reports Specific purpose General purpose

produced

Level of detail Often very detailed Usually broad view

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 Regulations Unregulated Usually subject to accounting

regulation

Reporting interval As short as required by managers Usually annually, semi-annually

or quarterly

Time Orientation Often based on projected future Almost always historical

information and past information

Range and quality of Financial and non-financial Financial information, great

information
information, often uses non- emphasis on objective, verifiable
evidence
verifiable information

3.3 Organizational limitations and threats according to accounting regulatory concepts

(GAAP, IFRS from FASB) and accounting principles and ethics

In recent years, the trend of business internationalization and financial market integration
has been increasing. This gave impetus to international unification of accounting rules. A common
set of rules can ensure consistency and comparability of financial information across
organizations. Financial information is an important factor for stakeholders such as investors,
creditors, customers, partners and regulators. These stakeholders need reliable information to
make business decisions. Accounting regulations provide a set of principles and procedures used
to record and present financial information. This makes it easier for stakeholders to understand
and compare financial information of different organizations. It can also reduce the burden on
international companies in preparing financial reports.

The Financial Accounting Standards Board (FASB) is an independent organization that

exists in the private sector. It is responsible for setting accounting standards for financial reporting

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in the United States and follows the FASB Standards, also known as Generally Accepted
Accounting Principles (GAAP).

To establish universal accounting standards, the Financial Accounting Standards Board

coordinates with the International Accounting Standards Board (IASB), which is responsible for
International Financial Reporting Standards (IFRS) (CFI Team, 2023).

GAAP, or Generally Accepted Accounting Principles, are standards that cover the details,
complexities, and legalities of business and corporate accounting. The Financial Accounting
Standards Board (FASB) uses GAAP as the foundation for its comprehensive set of approved
accounting methods and practices (Matos, 2023).

Figure 3 Main principles of the gaap framework

IFRS stands for International Financial Reporting Standards. IFRS is the international accounting
framework for organizing and reporting financial information properly. It originates from the
statements of the London-based International Accounting Standards Board (IASB). It is now the
mandatory accounting framework in more than 120 countries. IFRS requires businesses to report

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financial results and financial position according to similar rules; This means that, barring any
fraud, there is significant uniformity in the financial reporting of all businesses using IFRS, making
it easier to compare and contrast their financial results (Bragg, 2023).

Ethics in accounting is a set of principles and regulations intended to ensure the integrity and
objectivity of financial information. Ethics in accounting is not only a belief in right and wrong,
but also standards of good and bad behavior that accountants must adhere to. There are 5 ethical
principles in accounting : Integrity , Objectivity , Professional competence and due care,
Confidentiality and professional conduct.

Limitations and threats of accounting regimes and accounting ethics Materiality and
conservatism are two important accounting principles that help ensure the integrity and reliability
of financial information. However, Materiality relates to an item's impact on a firm's overall
financial condition and operations. Conservatism dictates that when in doubt, choose the method
that will be the least likely to overstate assets and income. In addition, accounting regulations and
accounting ethics also have other limitations, such as Accounting regulations are often designed
for large and complex organizations. Organizations that are smaller or operate in specific
industries may need to adapt their accounting regulations to suit their needs. Accordingly,
accounting regulations can also create a number of threats to organizations such as Accounting
regulations can make financial information complex and confusing for stakeholders. This can
reduce the transparency of financial information. Accounting regulations can limit the ability of
organizations to tailor financial information to fit their specific needs. Or the principles and ethics
of accounting may not be fully understood or followed . In addition, there are threats of accounting
fraud, accounting bias or threats of professional ethics violations.

IV. CONCLUSION

In summary, in a market economy accounting plays a particularly important role in

reflecting and providing economic information to serve the business management requirements of
enterprises . For business administrators, it is the basis for deciding to manage production and
business activities, inspecting and monitoring supplies, capital and assets of the business . For the
state, it is the basis for checking the compliance with financial and accounting regimes, the basis
for finding the best tax calculation method to limit tax loss, limit mistakes in tax policy and
establish regulations. appropriate economic policy. For investors and other subjects, it is the basis
for investment decisions, financing decisions, etc. Different types of accounting are based on the

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main users of accounting information. The relationship between the accounting function and other
functions in the organization is a mutual and complementary relationship. Accounting provides
information to other functions in the organization so that these functions can perform their duties
well and vice versa. To meet the needs and expectations of the organization, its stakeholders and
society, the accounting function needs to have a close relationship with other functions within the
organization. This relationship needs to be built and maintained effectively, to ensure the provision
of accurate, timely and useful accounting information to relevant parties. Job opportunities in the
accounting industry are very open and widely distributed in many fields and levels. To hold an
accounting position, skills and abilities are indispensable. In particular, understanding the CGMA
Competency Framework will help you have a more comprehensive view and know what skills are
really needed in the business. Accounting is part of the overall information of the business.
Accounting information is an important part of the process that helps us weigh different factors to
make accurate resource allocation decisions. Through the lesson, distinguish between financial
accounting and management accounting. Accounting regulations, principles and ethics in
accounting play an important role in ensuring the accuracy and integrity of accounting
information. However, these regulations and guidelines can also lead to some restrictions and
threats to businesses.

V. REFERENCE

Atrill, P. and McLaney, E. (2022) Accounting and finance for non-specialists. Harlow, England:
Pearson.

Bragg, S. (2023) IFRS definition, AccountingTools. Available at:

https://www.accountingtools.com/articles/what-is-ifrs.html (Accessed: 09 October 2023).

Career development (2022) What Are the Functions of Accounting? Available at:
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CFI Team (2023) Financial Accounting Standards Board (FASB), Corporate Finance Institute.
Available at: https://corporatefinanceinstitute.com/resources/accounting/financial-accounting-
standards-board-fasb/ (Accessed: 09 October 2023).

CGMA competency framework 2019 edition (2021) AICPA & CIMA. Available at:
https://www.aicpa-cima.com/resources/article/cgma-competency-framework (Accessed: 09
October 2023).

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Huong (2022) Khung Năng Lực đối Với Nghề KẾ Toán Trong Bối Cảnh Hội NHẬP Quốc tế ...
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Kagan, J. (2023) What does an accountant do? duties, rules, skills, and history, Investopedia.
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Kenton, W. (2023) Financial accounting meaning, principles, and why it matters, Investopedia.
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October 2023).

Le, N. (2018) Kế Toán Quản Trị: Yếu TỐ ảnh Hưởng đến chất Lượng Kiểm toán Báo Cáo Tài
Chính, Tạp chí Công Thương. Available at: https://tapchicongthuong.vn/bai-viet/ke-toan-quan-tri-
yeu-to-anh-huong-den-chat-luong-kiem-toan-bao-cao-tai-chinh-29222.htm (Accessed: 08
October 2023).

Ly (2023) Thách thức và cơ hội trong ngành công Nghệ internet Vạn Vật. Available at:
https://ptithcm.edu.vn/thong-tin-nganh-dao-tao/thach-thuc-va-co-hoi-trong-nganh-cong-nghe-
internet-van-vat-iot.html (Accessed: 08 October 2023).

Matos (2023) Generally accepted accounting principles (GAAP) - guidelines & policies,
Accounting.com. Available at: https://www.accounting.com/resources/gaap/ (Accessed: 09
October 2023).

Ngoc (2022) Kỹ Năng rèn Luyện Tính Cẩn thận để KẾ Toán Luôn thành công, Working. Available
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(Accessed: 09 October 2023).

Ross, S. (2023) How financial accounting differs from Managerial Accounting, Investopedia.
Available at: https://www.investopedia.com/ask/answers/041015/how-does-financial-accounting-
differ-managerial-accounting.asp (Accessed: 09 October 2023).

Taca (2022) Tìm Hiểu về Hệ thống thông tin Kế Toán là gì?, TACA. Available at:
https://taca.edu.vn/he-thong-thong-tin-ke-toan/ (Accessed: 09 October 2023).

What is management accounting? (2023) FreshBooks. Available at:

https://www.freshbooks.com/hub/accounting/management-accounting (Accessed: 08 October
2023).

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