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Chapter 2

The Demand of Global – E-Commerce

THE ACCOUNTANT OF THE 21ST CENTURY


• The accountant is part of the management team involved in strategic planning,
budgeting, and control.
The accountant is expected to make decisions as:

 Business planner
-involved in the preparation of master budget.
 Economic Forecaster
-determines the profitability trend of the company.
 Financial analyst
-evaluates the financial statements of the entity.
-determines the profitability, solvency, and liquidity.
 Management consultant
-concern with productivity, cost control, customer service.
 Systems analyst
-participates in the design, development, maintenance and control of electronic systems to
ensure that these are in accordance with the requirements for processing accounting
and financial information.

Accountant must possess the following skills:


• Effective communication skills
• Positive attitude
• Good values
• Pleasing personality
• Competence
• Flexible and adaptable
• Creative and innovative
• Critical mind
• Interpersonal skills
• Intellectual skills
- analytical thinker
- problem solver
- decision maker
Knowledge that an accountant must possess:
• General knowledge
-history, culture
-appreciate the different political & social forces around the world.

• Business knowledge
-includes economics, business statistics, quantitative methods, operations, management,
organizational behavior.
-other social and cultural courses in business which makes one understand how
business works.

• Information Technology Knowledge


conversant in IT concepts and proficient in the implementation and use of information
technology, design and implementation of internal control in computer based system.
• Accounting and Auditing knowledge
Makes one understand the accountant’s reports, form rational judgment so as to come up with
sound business decision.

Present Day Accountant

Qualifications:
• a Filipino Citizen
• with good moral character
• has not been convicted of any criminal offense involving moral turpitude
• is a holder of the degree of Bachelor of Science in Accountancy

The Board of Accountancy has made salient revisions to the Philippine Accountancy Act of
2004.

Instead of one program, B.S Accountancy, three more programs will be opened:
 BS Internal Auditing
 BS Management Accounting
 BS Accounting Information System

The graduates of these programs are required to take Level 1 Examination consisting of the
core of accountancy subjects:
 Financial Accounting and Reporting
 Advanced Financial Accounting and Reporting
 Management Advisory Services
 Taxation and Regulatory Framework for Business Transactions

This will be called Certified Accountant Examination. As a CA one can work in the
government or in private sectors or do public practice.

However, Auditing and signing of audit certificates and teaching accounting can only be
performed by passers of the Level II examination which is specialized in nature and is
called Certified Public Accounting Examination or Certified Professional Accounting
Examination.

The Accountants, before renewing their professional identification numbers, are required to
comply with RA 10917 otherwise known as the CPD Act of 2017 by attending accredited
seminars.

Career Opportunities

PUBLIC ACCOUNTING - Offers services to the public like bookkeeping, auditing, accounting,
tax and financial planning.
Auditor
-makes an independent review of the financial records of the firm and renders
an opinion as to the fairness of the firm’s financial statements.
Tax consultant
- skilled in tax matters and gives advise concerning tax.
Management consultant
-provides services ranging from accounting system analysis, design, review
and installation, financial planning, budgeting and cost controls.

• INDUSTRY ACCOUNTING – also called as Private Accounting.


Employed in a firm as:
-financial accountant
-Controller/chief accounting officer
- overall in-charge of all accounting activities function as the chief accounting
officer of the corporation whose work includes both financial accounting and
management accounting.
-Budget officer
- prepare plans and forecasts of the company’s future operation.
-Internal auditor
- an accountant who assists in the organization’s internal control by conducting
on-going review to ensure efficient and effective operation, compliance with company
policies and protection of company’s resources.
-Chief information officer
- is in charge of the information and communication technology department
whose function is to oversee the electronic data processing operation to ensure its
efficient performance, maintenance and control.
-Tax officer
- handle tax plans, prepare tax returns and advises management of the effect of
taxes on his various plans and projects. The complexity of the tax law requires a high
level of competence which can be provided by a licensed accountant.

• GOVERNMENT ACCOUNTING-one works in any of the government agencies.


- Commission on Audit (COA), BIR, GSIS, BSP, BOC, NBI, PRC.

• RESEARCH & EDUCATION


- Researcher
o Investigates and makes a study, creating and applying relating or
improving accounting theories and business concepts that will address the
current problem/changes in a particular business or industry sector.
- Teacher
- Reviewer

Accounting Areas

Basic accounting or bookkeeping - routine activity of recording, classifying and


summarizing business transactions in a systematic manner.
- Procedural aspect of accounting.

Intermediate accounting - involves the preparation and interpretation of financial


statements primarily for external users.

Financial statements are concerned with:


- performance (profit/loss)
-position (liquid, solvent)
-structure (loan/equity)
-compliance with legal and regulatory requirements.

• Cost accounting - deals with the recording, classifying and summarizing the details of
materials, labor and overhead necessary to produce and sell a product or service.

• Management accounting - deals with financial and non-financial information


primarily for managers to assist them in planning, directing and controlling the affairs
of the business.
The accounting information are used to:
a.) evaluate performance
b.) determine, analyze and control costs and costs behavior to achieve target profits.
c.) prepare operating and capital budgets
d.) design and install accounting information system

• Auditing - deals with verification and examination of the accounting records for the
purpose of giving an opinion on the fairness of the presentation of the financial
statements.

• Government and Non-Profit accounting


- Fund accounting
- Deals with the administration or use of public or community funds to bring about
service to the community.
- Objective is more on how the funds are used to service the people rather than to
earn profit.

• Tax accounting - deals with tax matters affecting firms.


- Involves preparation of tax returns, interpretations and application of tax rules in
the determination of tax liability, analyzing tax effect on projects or plans.

• Forensic accounting - It integrates accounting, auditing and investigative skills.


- Forensic accountant works closely with lawyers and helps in solving fraud and
illegal transactions involving embezzlement of funds, bankruptcy cases, or
securities fraud which could be tracked down by reviewing financial records.

Professional Regulatory Bodies

PRC (PROFESSIONAL REGULATION COMMISSION)


-In charge of regulating and licensing the practice of a profession.
Its primary functions are:
1.) maintaining and enforcing professional examinations
2.) promulgating and implementing standards and ethics in the practice of a
profession.
3.) providing legal and other regulatory services such as hearing formal complaints.
4.) acting on valid complaints by suspending and revoking license of an erring
professional.

BOA (BOARD OF ACCOUNTANCY)


-composed of a chairman and 6 members
-tasked to set up and promulgate a set of professional standards and ethics in the
practice of the accounting profession.
-conducts semi-annually CPA licensure exam
-monitor the practice of accountancy in the Phil.

PICPA (PHIL. INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS)


-It is the integrated national professional organization of CPAs in the Phil.
-Accredited by BOA and PRC (accreditation no. 15 dated Oct.2, 1975)
- is now considered the integrated national professional organization of certified
public accountants.
 Accounting Associations under PICPA
 NACPAE –Association of CPA in Education
 ACPACI- Association of CPA in Commerce and Industry
 GACPA- Government Association of CPA
 AIA- Association of Internal Auditors
 ACPAPP- Association of CPA in Public Practice

BSP (BANGKO SENTRAL NG PILIPINAS)


-monitors banks, importations and exportations, Phil. Peso exchange rate.

BIR (BUREAU OF INTERNAL REVENUE)


-ensures compliance of tax and license requirements of businesses.
-collection of taxes

SEC (SECURITIES & EXCHANGE COMMISSION)


-regulates business operations specifically partnership and corporation, entities
granted license/franchise to operate and foreign companies doing business in the country
-It reviews/registers securities issued by firms, evaluate financial position and
performance, supervises brokers, dealers, transfer agents, investment houses and capital
market participants.
-it is tasked to safeguard public interest specially investors in the capital market
International Accounting Standards

• 1973 – emergence of a private institution known as International Accounting


Standards Committee as a standard unifying body.
• International Accounting Standards Board (IASB)- took over the IASC and is
currently tasked to formulate new standards for financial reporting and measurement
called the IFRS (International Financial Reporting Standards)
• In 1996- the Phil. Has aligned its accounting standards to the IAS (Int’l. Accounting
standards and IFRS and Interpretations.

Accountancy Act of 2004/ Republic Act 9298


Objectives:
• Standardization and regularization of accounting education.
• Examination for registration of certified public accountants.
• Supervision, control and regulation of the practice of accountancy in the Phil.

Salient provisions of Accountancy Act of 2004


• Defines the standard of practice and services that an accountant may engage in (Career
fields)
• Mandates the creation of standard setting bodies such as PFRSC, Auditing Std. Council.
• Mandates the creation of the education technical council (curriculum making, teaching
stds. evaluating performance of educational institutions offering accountancy
program)
• Requires the taking of the licensure examination, registration and licensing of certified
public accountants before they can go into practice.
• Issuance of professional identification card.
• Enumerates prohibitions, vested rights and limitations in the practice of accountancy.
• Requires certificate of accreditation for individual CPAs as well as firms and
partnerships of CPAs.
• Promulgation by PRC of a continuing professional education CPE for all CPAs as a pre
requisite for renewal of license to practice.
Good Governance - It is the process of giving overall directions by overseeing and steering
the activities of the business to ensure that the interests of all stakeholders are protected.
• It involves
proper structuring of managerial positions;
promoting ethical code of conduct;
ensuring credibility in financial reports;
making timely and relevant disclosures;
protecting and respecting the rights of the creditors;
encouraging good performance;
providing fair and just remuneration;
respecting the rights of workers;
complying with legal, regulatory and tax requirements.

Code of Professional Conduct - Is a set of rules designed to produce professional conduct


and behavior consistent with high ethical standards expected by the public.
• Ethics is a set of moral principles and values which guides one to distinguish between
right and wrong and to conduct oneself accordingly.

• It identifies 2 key elements:


-Integrity – should be straightforward and honest in all professional and
business relationship.
-Objectivity – should not allow bias, conflict of interest and undue influence of
others to override profession or business judgments.
• Other elements
-Competence – maintain professional knowledge and skill at the level require
to ensure that a client or employer receives competent professional services. Should act
diligently and in accordance with applicable technical and professional standards.

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