Quantitative Information

 Accounting relates to numbers

 The process of analyzing data using mathematical models in order
to understand a condition

Financial in nature
 It is directly concerned with using existing monetary values
 It deals with transactions that have monetary values
 Connected with money or how money is managed

Useful in decision making

 Before they can make any decisions about the firm, lenders,
investors, stakeholders, and the accountant must be aware of the
facts
 Creditors might decide how much money you are qualified for in
loans based on your financial information. Or, depending on the
data you supply, the lender may determine that you are unqualified
for a loan.
 Accounting information helps investors or stakeholders make
decisions about investing in your business.
 Financial data is used by stakeholders and potential investors to
assess your company's value
 It all comes down to the fact that investors and stakeholders want to
know how healthy your business's finances are before making a
choice. They are able to determine the profitability, identify your
funding sources, and estimate any risk.

Identifying as the analytical component

 analyzing financial transactions or investigating complex issues to
make a decision and develop solutions.
 deepening your understanding of the entity’s operations and
conditions

Measuring as the technical component

 Calculation or computation of economic or financial data in terms of
money and time.
 Practical related to mathematical.

Communicating as a formal component

 involve the complete communication process, as do all business
reports.
 The financial reports should be able to understand in clear and
coherent ways.

Identifying
 It means to determine what transactions to record.

Accountable event
 A business event having a monetary impact on the financial
statements of a business. It is recorded in the accounting records of
the business

Measuring
 putting business transactions into numerical form using money
units.
Business Transactions
 is event that affects the entity's financial position and needs to be
measurable in terms of money.

External Transaction
 There is an exchange value happen between one entity and other
entity

Internal Transaction
 The event that defines the transaction is measurable in monetary
terms and has an influence on the financial situation of the firm even
though these transactions do not involve the exchange of values in
other entity.
 Examples of such transactions include recording depreciation of
fixed assets, realizing the loss of assets caused by fire (Casualty),
converting raw materials into finished goods (Production)

Historical Cost
 the cost incurred during the purchase of the fixed asset.
 It is a measure of value used in accounting in which the value of an
asset on the balance sheet is recorded at its original cost when
acquired by the company.

Current cost
 is the book value or the remaining value or depreciated value of the
fixed asset

Communicating
 Financial information is regularly communicated through
accounting reports.
 Accounting is frequently referred to as the language of business
because financial records and accounting reports reveal how
financially healthy a company is. Typically, decision-makers use
financial statements when discussing the situation of their
organizations. Anyone who wants to communicate coherently in the
business sector must understand the components of financial
documents, including income, expenses, debt, and liabilities.

Identifying
 all financial transactions are recorded in a systematical and
chronological manner in general journal after they have been
identified and measured.

Classifying
 Grouping or separating accounts into different categories.
 This is necessary so that the rules of debit and credit can be
correctly applied.

Summarizing
 Preparation of financial statements: Statement of Comprehensive
income, Statement of changes in Equity, Statement of Financial
position, Statement of cash flows and Notes to financial statements.

Accounting as an information system

 provides all of the entity's information by preparing financial
statements for the users concerned according to their needs. That is
why accounting is called the information system.
Accounting information has an impact on decision making by helping
stakeholders, creditors and other users to evaluate past and future
events.
.
According to The Philippine Accountancy Act of 2004, all certified
public accountants (CPAs) must comply with the regulations, and rules
regarding continuing professional education that will be issued by the
Board of Accountancy (BOA).

Aspiring CPAs are required under Republic Act No. 9298, also known
as the Philippine Accountancy Act of 2004, to pass a written technical
exam in order to prove their proficiency and evaluate whether they are
suitable for this career field.
Passing the CPA board exam is required for anyone who wants to
practice accountancy as a profession.

Board of Accountancy
 supervising, controlling and regulating the practice of accountancy
with authority and distinction.
 Is the professional board of CPA in the Philippines under the
Professional Regulating Commission, a government agency
administered to register and regulate professionals in the
Philippines.
 to assist government in the licensing and regulation of the public
accounting profession.
Accreditation
 the fact of being officially recognized, accepted, or approved of

All individuals planning to practice public accounting, whether as sole

practitioners, partnerships, or firms, are required by law to hold an
accreditation certificate issued by the Board of Accountancy, including
their partners and personnel.

Public Accounting vs Private Accounting

 If you work in public accounting, you will interact with a variety of
clients and will generally be a licensed, certified public accountant
(CPA). Private accounting is concerned with the inner workings of
businesses, governments, and agencies. In this role, you may or may
not be a certified private accountant – not all private accounting jobs
require certification, but it is often preferred. Private accountants
work for specific companies and are an essential part of the success
of any organization. Public accounting requires certification as a
CPA, while private accounting does not require certification.
 Before the financial records of a client are made public, public
accounting involves verifying the records for accuracy and
completeness. Private accountants examine the internal company
records of their clients and collaborate with financial managers to
create budgets and assess financial performance.

Government Accounting
 Systematic process for collecting, classifying, recording,
summarizing, and interpreting all the financial transactions
including revenues and expenditures of all the government offices.
It maintains a record of all public funds.
Auditing
 examination and evaluation of financial statements for the purposes
of the expression of an opinion regarding whether the financial
statements are presented accurately and in accordance with the
applicable accounting principles.

Taxation
 It deals with the preparation of annual income tax return and tax
payments
 The most basic function of taxation is to fund government
expenditures.
Income tax return (ITR)
 The tax liability of a taxpayer is calculated based on his or her
income.
Management Advisory Services
 consulting services provided to a client by a specialized company.
These services are intended to provide advice regarding the
operations and finances of clients.
 means advisory services consisting of the development of findings,
conclusions or recommendations for the recipient's consideration
and decision making.
 means professional and administrative advice in areas relating to the
Business such as, but not limited to, finance, budgeting, tax planning,
risk management, business planning, manufacturing, sales, marketing,
staffing levels and acquisitions.

Continuing Professional Development (CPD)

 the learning activities professionals engage in to develop and
enhance their abilities.
 comprehensive strategy for enhancement of personal skills and
proficiency throughout a professional’s career.
 Continuously improving performance.

Republic Act No. 10912

 otherwise known as the “Continuing Professional Development
(CPD) Act of 2016”, is an act which requires CPD as the
mandatory requirement for the renewal of Professional
Identification Card of all registered and licensed professionals under
the regulation of the PRC.
 enacted to upgrade the practice of Filipino professionals

CPD Credit Units

 the value of learning that has been obtained by formal, informal, or
non-formal learning, including professional work experience, and
that can be accumulated to certain levels to qualify for a
certification.
 All other CPAs renewing their Professional ID Card will need a
minimum 15 CPD units of training (can be under any competence
area). CPAs getting BoA accreditation will still need 120 units of
CPD training.

Professionals can take their certifications to an employer as evidence

that they are qualified for a particular healthcare profession.

Accreditation is essentially an endorsement that a company has met

high standards of ethics, professionalism, and more.
Licensure is a process by which a government-associated agency gives
individuals express permission to practice an occupation. Licensure acts
as an endorsement that an individual has met minimum competency
standards.

Accounting vs Auditing
 Accounting is an activity involves maintaining records and
preparation & presentation of the financial statement.
 To illustrate an organization's performance, profitability, and
financial
 Accounting is a continuous process

 Auditing is the process of examining and verifying financial

statements. Its goal is to clarify the accuracy of the financial
statements that the company's accounting staff has prepared. As a
result, it ensures the accuracy and validity of accounting data.
 to prove how accurately and fairly an organization's financial
statements view its situation.

Accounting vs bookkeeping
 Bookkeeping is recording of financial transactions. It is in charge of
documenting financial transactions.
 Bookkeepers are responsible for recording daily financial
transactions in the correct chronological order.
 Accounting is in charge of evaluating, classifying, analyzing,
reporting, and summarizing the financial data. Accountants are
responsible for preparing and analyzing a wide variety of financial
records. Ensuring that all firm funds are accurately recorded and
accounted for.

Accounting vs Accountancy
 Accounting is the effective application of accountancy principles to
carry out the fundamental obligations of the profession.
 is commonly used for all accounting practices and procedures in
application.
 describe the actual practice of accounting.
 Accountancy is work or profession of an accountant.
 is commonly used to distinguish either professional degree, through
which the most of accountants are trained, and academic degrees
that focus on the academic side of the field.
 In other words, accountancy deals with the conceptual, and
accounting deals with the practical. The term “accountancy” refers
to the study, principles and theory of accounting, while the term
“accounting” is commonly used for all accounting practices and
procedures in application

Financial Accounting vs Managerial Accounting

 The main objective of managerial accounting is to produce useful
information for a company's internal use.
 Financial accounting has some internal uses as well, but it is much
more concerned with informing those outside of a company.
 Financial accounting is made for investors, creditors, and industry
regulators, just as managerial accounting is made for a company's
management.
 Reports generated through managerial accounting are only
circulated internally
 Financial accounting reports often consist of generalized, brief
summaries. Information is both less revealing and more transparent.
Managerial accounting reports are technical, detailed, specific and
often experimental in nature.
 Financial accounting must conform to certain standards, in
accordance with GAAP

Generally accepted accounting principles (GAAP)

 Set of accounting rules, procedures and practice that must be
followed for financial reporting.
 All companies, whether public, government, or nonprofit, are
required to prepare their financial statements in accordance with
GAAP rules.
 developing and establishing uniform accounting rules and
guidelines for the preparation and presentation of financial
statements

Accounting standards
 It specifies when and how economic events are to be recognized,
measured, and displayed
 Accounting standards ensure the comparability of the financial
accounts of various businesses. Accounting standards give the
financial statements credibility by ensuring that all businesses
comply to the same rules, allowing more economic decisions to be
made using accurate and consistent information.
 Generally Accepted Accounting Principles are expressed and found
in the Accounting Standards. Accounting Standard setters globally
aims the unification of accounting standards throughout the world.

The Financial Reporting Standards Council (FRSC) was established

by the Professional Regulatory Commission under the Implementing
Rules and Regulations of the Philippine Accountancy of Act of 2004 to
assist the Board of Accountancy in carrying out its power and function
to promulgate accounting standards in the Philippines. The FRSC’s
main function is to establish generally accepted accounting principles in
the Philippines.

The FRSC is the successor of the Accounting Standards Council

(ASC). The ASC was created in November 1981 by the Philippine
Institute of Certified Public Accountants (PICPA) to establish
generally accepted accounting principles in the Philippines. The FRSC
carries on the decision made by the ASC to converge Philippine
accounting standards with international accounting standards issued by
the International Accounting Standards Board (IASB)

The FRSC consists of who a Chairman and members are appointed by

the BOA and include representatives from the Board of Accountancy
(BOA), Securities and Exchange Commission (SEC), Bangko
Sentral ng Pilipinas (BSP), Financial Executives Institute of the
Philippines (FINEX), Commission on Audit (COA) and Philippine
Institute of Certified Public Accountants (PICPA). The FRSC has
full discretion in developing and pursuing the technical agenda for
setting accounting standards in the Philippines. Financial support is
received principally from the PICPA Foundation.
The FRSC monitors the technical activities of the IASB and invites
comments on exposure drafts of proposed IFRSs as these are issued by
the IASB. When finalized, these are adopted as Philippine Financial
Reporting Standards (PFRSs). The FRSC similarly monitors issuances
of the International Financial Reporting Interpretations Committee
(IFRIC) of the IASB, which it adopts as Philippine Interpretations–
IFRIC. PFRSs and Philippine Interpretations–IFRIC approved for
adoption are submitted to the BOA and PRC for approval.

The FRSC formed the Philippine Interpretations Committee (PIC) in

August 2006 to assist the FRSC in establishing and improving financial
reporting standards in the Philippines. The role of the PIC is principally
to issue implementation guidance on PFRSs. The PIC members are
appointed by the FRSC and include accountants in public practice, the
academe and regulatory bodies and users of financial statements. The
PIC replaced the Interpretations Committee created by the ASC in
2000.