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  • Accounting Functions in Businesses: Topic 1

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    معن الفاعوري
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    This document discusses accounting functions in businesses. It outlines three main accounting functions: financial accounting, external auditing, and internal auditing. Financial accounting is the main accounting system that supports managers and other users. External auditing is an independent function that protects users from mistakes or fraud. Internal auditing is also independent and protects users, while being formulated by professional standards. The document then discusses accounting theory, the relationship between theory and professional frameworks, and how accounting frameworks provide structure and standards to guide accounting practice.

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    This document discusses accounting functions in businesses. It outlines three main accounting functions: financial accounting, external auditing, and internal auditing. Financial accounting is the main accounting system that supports managers and other users. External auditing is an independent function that protects users from mistakes or fraud. Internal auditing is also independent and protects users, while being formulated by professional standards. The document then discusses accounting theory, the relationship between theory and professional frameworks, and how accounting frameworks provide structure and standards to guide accounting practice.

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    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
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    2 views10 pages

    Accounting Functions in Businesses: Topic 1

    Uploaded by

    معن الفاعوري
    This document discusses accounting functions in businesses. It outlines three main accounting functions: financial accounting, external auditing, and internal auditing. Financial accounting is the main accounting system that supports managers and other users. External auditing is an independent function that protects users from mistakes or fraud. Internal auditing is also independent and protects users, while being formulated by professional standards. The document then discusses accounting theory, the relationship between theory and professional frameworks, and how accounting frameworks provide structure and standards to guide accounting practice.

    Copyright:

    © All Rights Reserved
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    of 10

    Topic 1

    Accounting Functions in
    Businesses

    Dr Ebrahim Mansour
    Hashemite Uni.

    1
    BOD Owners
    Management

    Internal
    Auditing

    2
    Accounting Functions in
    Businesses

    • Financial Accounting
    - Main accounting system serving managers and
    other users
    - Supported by sub accounting systems (cost and
    managerial)
    - Best to be practiced by professionals
    - Formulated by professional frameworks
    (standards)
    3
    Accounting Functions in
    Businesses

    • External Auditing
    - Independent function
    - Protecting users from any accounting
    mistakes or fraud
    - Should be practiced by professionals
    - Formulated by professional frameworks
    (standards)
    4
    Accounting Functions in
    Businesses

    • Internal Auditing
    - Technically it is an independent function from
    executive managers
    - Protecting users from any accounting mistakes
    or fraud
    - Best to be practiced by professionals
    - Formulated by professional frameworks
    (standards)
    5
    Professional Framework in accounting

    • What is accounting theory?


    • What is the relationship of accounting
    theory and professional framework?
    • What is the professional framework?

    6
    Accounting Theory Defined
    “. . . a set of basic concepts
    and assumptions and related
    principles that explain and
    guide the accountant’s
    actions in identifying,
    measuring, and
    communicating economic
    information.”
    Structure of Accounting Theory
    Informal Approach

    Accounting
    Theory

    Accounting theory is somewhat like a cloud, i.e. not well-defined.


    Accounting Theory and the need for accounting framework

    STANDARDS

    PRINCIPLES

    ASSUMPTIONS
    9
    Accounting in practice is

    Recognition

    10

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