OVERVIEW OF

ACCOUNTING
Accounting is the process of identifying,
measuring, and communicating economic
information to permit informed judgements
and decisions by users of the information

Three Important Activities:

• Identifying
• Measuring
• Communicating
Identifying is the process of analyzing events
and transactions to determine whether or not
they will be recognized

Recognition refers to the process of including

the effects of an accountable event in the
statement of financial position or the
statement of comprehensive income through
a journal entry

Note: Only accountable events are recognized

An accountable event affects the assets,
liabilities, equity, income or expenses of an
entity.

It is also known as economic activity. Only

economic activities are emphasized
recognized in accounting. Sociological and
psychological matters are not recognized.

Non-accountable events are not recognized

but disclosed through a memorandum entry.
TYPES OF EVENTS AND TRANSACTIONS
External events – involve an entity and another
external party

Internal events – do not involve an external

party
TYPES OF EXTERNAL EVENTS
Exchange (reciprocal transfer) – an event wherein
there is a reciprocal giving and receiving of
economic resources or discharging of economic
obligations between an entity and external party

Examples are sales, purchases and payment of

liabilities
TYPES OF EXTERNAL EVENTS
Non-reciprocal transfer – a “one-way” transaction
in that the party giving something does not receive
anything in return while the party receiving does
not give anything in exchange.

Examples are donations, payment of taxes, theft,

imposition of fines
TYPES OF EXTERNAL EVENTS
External event other than transfer – event that
involves changes in the economic resources or
obligations caused by an external party or external
source but does not involve transfer of resources
or obligations.

Examples are changes in fair value, obsolescence,

technological advances and vandalism
TYPES OF INTERNAL EVENTS
Production – the process by which resources are
transformed into finished goods.

Examples are conversion of raw materials to

finished goods and production of farm products
TYPES OF INTERNAL EVENTS
Casualty – unanticipated loss from disasters or
other similar events

Examples are loss from fire, flood and other

catastrophes
TEST
ACCONTABLE EVENT OR NON-ACCOUNTABLE EVENT?

Purchased a building

Sale of merchandise inventory

Ordered office supplies from local supplier

The company is facing a civil lawsuit.

The company lost in the lawsuit and will be required to pay

penalties

Passing of a law prohibiting a certain substance the company

is using as raw materials
Measuring involves assigning numbers,
normally in monetary terms, to economic
transactions and events

Most common basis of measurement is

historical cost
Financial statements are said to be prepared
using a mixture of costs and values.
Costs include historical cost and current cost
while Values include other measurement bases
(Examples are Present Value and Net
Realizable Value)
VALUATION BY FACT OR OPINION

Items are said to be valued by OPINION when

they are AFFECTED by ESTIMATES (Estimates
of uncollectible receivables, estimated liabilities
and depreciation using estimates for useful life)

Items are said to be valued by FACT when they

are UNAFFECTED by ESTIMATES (Face
amount of cash, land at acquisition cost,
ordinary share capital at par value)
Communicating is the process of transforming
economic data into useful accounting
information (financial statements or other
accounting reports) for dissemination to users.
It also involves interpreting the significance of
the processed information.

RECORDING CLASSIFYING SUMMARIZING

Recording refers to the process of systematically
committing into writing the identified and measured
accountable events in the journal through journal entries

Classifying involves the grouping of similar and

interrelated items into their respective classes through
postings in the ledger

Summarizing is putting together or expressing in

condensed form the recorded and classified
transactions and events. This includes the preparation
of financial statements and other accounting reports
Interpreting the processed information involves
the computation of financial statement ratios.
Some regulatory bodies such as the Bangko
Sentral ng Pilipinas (BSP) require certain
financial ratios to be disclosed in the notes to
financial statements
BASIC PURPOSE OF ACCOUNTING
To provide information that is useful in making economic
decisions.

Economic entities use accounting to record economic

activities, process data, and disseminate information
intended to be useful in making economic decisions.

An economic entity is a separately identifiable combination

of persons and property that uses or controls economic
resources to achieve certain goals or objectives.
Not-for-profit entity – one that carries out
some socially desirable needs of the
community or its members and whose
activities are not directed towards making
profit

Business entity – one that operates primarily

for profit
EXAMPLES OF ECONOMIC ACTIVITIES

Production – the process of converting economic resources

into outputs of goods and services that are intended to have
greater utility than the required inputs

Exchange – the process of trading resources or obligations

for other resources or obligations

Consumption – the process of using the final output of the

production process

Income distribution – the process of allocating rights to the

use of output among individuals and groups in society
EXAMPLES OF ECONOMIC ACTIVITIES

Savings – the process of setting aside rights to present

consumption in exchange for rights to future consumption

Investment – the process of using current inputs to increase

the stock of resources available for output as opposed to
immediately consumable output
TYPES OF INFORMATION PROVIDED BY ACCOUNTING

Quantitative Information – information expressed in

numbers, quantities or units

Qualitative Information – information expressed in words or

descriptive form and is usually found in the notes to
financial statements as well as on the face of the other
financial statements

Financial Information – information expressed in money.

Financial information is also quantitative information because
monetary amounts are normally expressed in numbers
TYPES OF INFORMATION CLASSIFIED AS TO USERS’ NEEDS

General Purpose – designed to meet the common needs of

most users and provided in financial accounting.
General purpose information is governed by generally
accepted accounting principles (GAAP) represented by
Philippine Financial Reporting Standards (PFRS)

Special Purpose – designed to meet the specific needs of

particular statement users and provided by other types of
accounting other than financial accounting such as
managerial accounting and tax accounting
Information in the financial statements is not obtained only
from the accounting records. Some are obtained from
external sources such as fair value measurements, future
lease payments and contractual commitments.
Accounting as science and art
As a social science, accounting is a body of knowledge which
has been systematically gathered, classified and organized.
As a practical art, accounting requires the use of creative skills
and judgement.

Accounting as an information system

Accounting identifies and measures economic activities,
processes information into financial reports, and communicates
these reports to decision makers.

Accounting as a language of business

Accounting is often referred to as “language of business”
because it is fundamental to the communication of financial
information.
CREATIVE THINKING AND CRITICAL THINKING IN ACCOUNTING

Creative thinking involves the use of imagination and insight

to solve problems by finding new relationships among items
of information. It is most important in identifying alternative
solutions.

Critical thinking involves the logical analysis of issues, using

inductive or deductive reasoning to test new relationships to
determine their effectiveness. It is most important in
evaluating alternative solutions.
5 STEPS IN PROBLEM SOLVING

1. Recognizing a problem
2. Identifying alternative solutions
3. Evaluating the alternatives
4. Selecting a solution from among the
alternatives
5. Implementing the solution
ACCOUNTING
CONCEPTS
Accounting concepts refer to the principles
upon which the process of accounting is
based. The term accounting concepts is used
interchangeably with the following:

1. Accounting Assumptions or Accounting

Postulates

2. Accounting Theory
Accounting assumptions (Accounting
postulates)

Fundamental concepts or principles and

basic notions that provide the foundation of
the accounting process
Accounting Theory
The logical reasoning in the form of a set of broad
principles that provide a general frame of
reference by which accounting practice can be
evaluated and guide the development of new
practices and procedures. It is the organized set
of concepts and related principles that explain
and guide the accountant’s action in identifying,
measuring, communicating accounting
information. Accounting theory comprises the
Conceptual Framework and the Philippine
Financial Reporting Standards (PFRS).
ACCOUNTING CONCEPTS
Double-entry system – each accountable event is
recorded in two parts (debit and credit)
Going Concern assumption – the entity is assumed to
carry on its operations for an indefinite period of time
The measurement basis of costs and values is
appropriate only when the entity is a going concern. If
the entity becomes a liquidating concern, the
appropriate basis is realizable value.
ACCOUNTING CONCEPTS
Separate Entity (Accounting entity, business entity,
entity concept) – the entity is viewed separately from
its owners. Accordingly, the personal transactions of
the owners among themselves or with other entities
are not recorded in the entity’s accounting records.
This concept defines area of interest of the
accountant.
ACCOUNTING CONCEPTS
Stable Monetary Unit (Monetary Unit Assumption)
• Assets, liabilities, equity, income and expenses are stated in
terms of a common unit of measure, which is the peso in
the Philippines
• The purchasing power of the peso is regarded as stable or
constant and that its instability is insignificant and
therefore ignored.
To be useful, accounting information should be stated in a
common denominator (foreign currencies should be translated
into peso)
ACCOUNTING CONCEPTS
Time Period (Periodicity/Accounting Period) – the life of the
entity is divided into series of reporting periods which is
usually 12 months and is either:

▸ Calendar year – January 1 to December 31 of the same

year

▸ Fiscal year – still covers 12 months but starts on a date

other than January 1
ACCOUNTING CONCEPTS
Materiality Concept – information is material if its omission or
misstatement could influence economic decisions. Materiality
is a matter of professional judgement and is based on the size
and nature of the item being judged.

Cost-benefit (Cost constraint/Reasonable assurance) – the

cost of processing and communicating information should not
exceed the benefits to be derived from it.
ACCOUNTING CONCEPTS
Accrual Basis of Accounting – the effects of transactions and
other events are recognized when they occur (and not as cash
is received or paid) and they are recorded in the accounting
records and reported in the financial statements of the periods
to which they relate.
Under accrual basis, income is recognized when earned rather
than when cash is collected and expenses are recognized
when incurred rather than when cash is paid.
ACCOUNTING CONCEPTS
Historical Cost (Cost Principle) – the value of an asset is
determined on the basis of acquisition cost.

However, this concept is not maintained because the PFRSs

require that some assets are measured at values other than
historical cost such as fair value and net realizable value.
ACCOUNTING CONCEPTS
Concept of Articulation – all the components of a complete
set of financial statements are interrelated. The preparation of
a worksheet recognizes that the financial statements interact
with each other. Accordingly, when users use the financial
statements in making decisions, they need to use each
financial statement in conjunction with the other financial
statements.
Management has plans to expand by acquiring a new building
as its new branch. They are contemplating whether or not to
loan the amount required to purchase the property.

Management requested the Income Statement for the past 5

years and saw that the company has been operating profitably.
They decided to start processing a loan with a local bank and
submitted all necessary requirements including a complete set
of financial statements.

After days of waiting, management followed up with the bank

and found out that their loan request was rejected because it
turns out that the company’s assets were already financed by
70% debts. What went wrong?
ACCOUNTING CONCEPTS
Full Disclosure Principle – this principle recognizes that the
nature and amount of information included in the financial
statements reflect series of judgmental trade-offs. The trade-
offs strive for:
▸ Sufficient detail to disclose matters that make a difference
to users, yet
▸ Sufficient condensation to make the information
understandable, keeping in mind the costs of preparing and
using it
ACCOUNTING CONCEPTS
Consistency Concept – the financial statements are prepared
on the basis of accounting principles that are applied
consistently from one period to the next. Changes in
accounting policies are made only when required or permitted
by the standards or when the change results to more relevant
and reliable information. Changes in accounting policies are
disclosed in the notes.
ACCOUNTING CONCEPTS
Matching – costs are recognized as expenses when the
related revenue is recognized such as with Cost of Goods Sold
and Cost of Sales.

Entity Theory – the accounting objective is geared towards

proper income determination. Proper matching of costs
against revenues is the ultimate end. This theory emphasizes
the income statement and is exemplified by the equation
“Assets = Liabilities – Capital”
ACCOUNTING CONCEPTS
Proprietary Theory – the accounting objective is geared
towards proper valuation of assets. This theory emphasizes
the importance of the balance sheet and is exemplified by the
equation “Assets – Liabilities = Capital”
Residual Equity Theory – this theory is applicable when there
are two classes of shares issued (ordinary and preferred). The
equation is “Assets – Liabilities – Preferred Shareholders’
Equity = Ordinary Shareholders’ Equity”
This theory is applied in the computation of book value per
share and return on equity.
ACCOUNTING CONCEPTS
Fund Theory – the accounting objective is geared towards the
custody and administration of funds. The objective is directed
towards cash flows, exemplified by the formula “Cash inflows
– Cash outflows = Funds”
This concept is used in government accounting and fiduciary
accounting.
Realization – the process of converting non-cash assets into
cash or claims for cash such as selling merchandise for cash
or for accounts receivable.
It is also the concept that deals with revenue recognition.
ACCOUNTING CONCEPTS
Prudence (Conservatism) – the use of caution when making
estimates under conditions of uncertainty, such that assets or
income are not overstated and liabilities or expenses are not
understated. In other words, when exercising prudence, the one
which has the least effect on equity is chosen.
However, the exercise of prudence does not allow the
deliberate understatement of assets or overstatement of
liabilities because financial statements would not be faithfully
represented.
EXPENSE RECOGNITION PRINCIPLES
Matching Concept (Direct association of cost and revenues) –
costs that are directly related to earning revenue are
recognized as expenses the same period the related revenue is
recognized.
For example inventory is initially recognized as an asset and
recognized as expense when sold.
EXPENSE RECOGNITION PRINCIPLES
Systematic and rational allocation – costs that are not directly
related to the earning of revenue are initially recognized as
assets and recognized as expenses over the periods their
economic benefits are consumed, using some method of
allocation.
For example fixed assets such as equipment and buildings are
recognized as assets and subsequently as depreciation
expense over periods they are utilized.
EXPENSE RECOGNITION PRINCIPLES
Immediate Recognition – costs that do not meet the definition
of an asset or ceases to meet the definition of an asset are
expensed immediately.
For example casualty losses and impairment losses.
COMMON BRANCHES OF ACCOUNTING
Financial accounting – branch of accounting that
focuses on general purpose financial statements.
General purpose financial statements are those
statements that cater to the common needs of
external users, primarily the potential and
existing investors, and lenders and other
creditors.
Financial accounting is governed by the
Philippine Financial Reporting Standards (PFRS)
COMMON BRANCHES OF ACCOUNTING
FINANCIAL ACCOUNTING VS FINANCIAL REPORTING
Though both focus on general purpose financial
statements, financial reporting endeavors to
promote principles that are also useful in other
financial reporting.
Other financial reporting comprises information
provided outside the financial statements that
assists in the interpretation of a complete set of
financial statements that assists in the
interpretation of a complete set of financial
statements or improve users’ ability to make
efficient economic decisions
COMMON BRANCHES OF ACCOUNTING
FINANCIAL STATEMENTS VS FINANCIAL REPORT
Financial statements are the structured
representation of an entity’s financial position
and results of operations (financial
performance). They are the end product of the
accounting process and the means by which
information gathered and processed are
periodically communicated to users.

Financial reports include financial statements

and other information
FINANCIAL STATEMENTS VS FINANCIAL REPORT

Financial reporting is the provision of financial

information about an entity that is useful to external
users, primarily the investors, lenders, and other
creditors, in making investment and credit
decisions

Primary objective: provide information about an

entity’s economic resources, claims and changes to
those resources
Secondary objective: provide information useful in
assessing the entity’s management stewardship
COMMON BRANCHES OF ACCOUNTING
Management accounting – refers to the
accumulation and communication of information
for use by internal users or management.
An offshoot of management accounting is
management advisory services which includes
services to clients on matters of accounting,
finance, business policies, organization
procedures, product costs, distribution, and many
other phases of business conduct and operations.
COMMON BRANCHES OF ACCOUNTING
Cost accounting – is the systematic recording
and analysis of the costs of materials, labor and
overhead incident to production.
Auditing – is the process of evaluating the
correspondence of assertions with established
criteria and expressing an opinion thereon.
Tax accounting – the preparation of tax returns
and rendering of tax advice, such as the
determination of the tax consequences of certain
proposed business endeavors
COMMON BRANCHES OF ACCOUNTING
Government accounting – refers to the
accounting for the government and its
instrumentalities, placing emphasis on the
custody of public funds, the purposes for which
those funds are committed, and the responsibility
and accountability of the individuals entrusted
with those funds.
Fiduciary accounting – refers to the handling of
accounts managed by a person entrusted with the
custody and management of property for the
benefit of another
COMMON BRANCHES OF ACCOUNTING
Estate accounting – refers to the handling of
accounts for fiduciaries who wind up the affairs of
the deceased person.
Social accounting (social and environmental
accounting or social responsibility reporting) – the
process of communicating the social and
environmental effects of an entity’s economic
actions to the society
Institutional accounting – the accounting for non-
profit entities other than the government
COMMON BRANCHES OF ACCOUNTING
Accounting systems – the installation of
accounting procedures for the accumulation of
financial data and designing of accounting forms
to be used in data gathering
Accounting research – pertains to the careful
analysis of economic events and other variables
to understand their impact on decisions.
Accounting research includes a broad range of
topics, which may be related to one or more
branches of accounting, the economy as a whole
or the market environment.
BOOKKEEPING AND ACCOUNTING
Bookkeeping refers to the process of recording the
accounts or transactions of an entity. Bookkeeping
normally ends with the preparation of the trial balance.
Unlike accounting, bookkeeping does not require the
interpretation of significance of the processed
information.
Accountancy refers to the profession or practice of
accounting. The practice of accounting can be
classified into Private and Public practice.
Public Practice – does not involve an employer-
employee relationship
Private Practice – involves an employer-employee
relationship
SECTORS OF ACCOUNTANCY PRACTICE
Under RA 9298 a.k.a the “Philippine Accountancy Act of
2004”, the practice of accounting is sub-classified into four (4).
Public Accountancy – involves the rendering of audit or accounting
related services to more than one client on a fee basis

Commerce and Industry – refers to employment in the private sector

in a position which involves decision making requiring professional
knowledge in the science of accounting and such position requires
that the holder thereof must be a certified public accountant
SECTORS OF ACCOUNTANCY PRACTICE
Education/Academe – employment in an education institution which
involves decision making requiring professional knowledge in the
science of accounting and such position requires that the holder
thereof must be a certified public accountant
Government – employment or appointment to a position in an
accounting professional group in the government or in a
government-owned or controlled corporation, including those
performing proprietary functions, where decision making requires
professional knowledge in the science of accounting, or where civil
service eligibility as a certified public accountant is a prerequisite
ACCOUNTING STANDARDS
The Philippine Financial Reporting Standards (PFRS) represent the
generally accepted accounting principles (GAAP) in the Philippines.
The PFRS are standards and Interpretations adopted by the Financial
Reporting Standards Council (FRSC). They comprise of:
1. Philippine Financial Reporting Standards (PFRS)
2. Philippine Accounting Standards (PAS)
3. Interpretations
PFRS are accompanied by guidance to assist entities in applying
their requirements. A guidance states whether it is an integral part
(mandatory) of the PFRS.
ACCOUNTING STANDARDS
The term “generally acceptable” means that either:
▸ The standard has been established by an authoritative
accounting rule-making body such as the PFRS adopted by the
FRSC; or
▸ The principle has gained general acceptance due to practice over
time and has been proven to be most useful such as double entry
recording and other implicit concepts
The process of establishing financial accounting standards is a
democratic process in that a majority of practicing accountants must
agree with a standard before it becomes implemented.
ACCOUNTING STANDARDS
Hierarchy of Reporting Standards
When selecting accounting policies, the entity considers the
following in descending order:
1. PFRS
2. In the absence of a PFRS, management shall use its judgement
ACCOUNTING STANDARDS
Hierarchy of Reporting Standards
When making judgement, management shall refer to, and consider
the applicability of the following sources in descending order:
a) The requirements in PFRS dealing with similar and related issues
b) The Conceptual Framework
Management may also consider the following:
a)Pronouncements of other standard-setting bodies
b)Accounting literature and accepted industry practices
ACCOUNTING STANDARDS
Who is responsible for the selection of appropriate accounting
policies?

MANAGEMENT

Note: Although the selection of appropriate accounting policies is the

responsibility of the entity’s management, the proper application of
accounting principles is most dependent upon the professional
judgement of the accountant
ACCOUNTING STANDARD SETTING BODIES AND OTHER ORGANIZATIONS

Financial Reporting Standards Council (FRSC) – the official

accounting standard setting body in the Philippines created under
RA 9298
Chairperson 1 The chairperson
BOA 1 should have been
COA 1
or is presently a
SEC 1
senior accounting
BSP 1
practitioner.
BIR 1
A major organization composed of preparers of
and users of financial statements 1
2 representatives each from the 4 sectors 8
TOTAL 15
ACCOUNTING STANDARD SETTING BODIES AND OTHER ORGANIZATIONS
Philippine Interpretations Committee (PIC) – a committee formed
by the Accounting Standards Council (ASC), the predecessor of
FRSC, with the role of reviewing the interpretations of the
International Financial Reporting Interpretations Committee (IFRIC)
for approval and adoption by the FRSC.
Board of Accountancy (BOA) – professional regulatory board
created under RA 9298 to supervise the registration, licensure and
practice of accountancy in the Philippines. It consists of a
chairperson and 6 members appointed by the President of the
Philippines. The Vice President is elected among its members for a
1-year term
ACCOUNTING STANDARD SETTING BODIES AND OTHER ORGANIZATIONS
Securities and Exchange Commission (SEC) – government agency
tasked in regulating corporations and partnerships, capital and
investment markets, and the investing public. Some SEC rulings
affect the adoption and application of accounting policies.

Bureau of Internal Revenue (BIR) – administers the provisions of the

National Internal Revenue Code. These provisions do not always
reflect the goals of financial reporting. However, they do at times
influence the choice of accounting methods and procedures.
ACCOUNTING STANDARD SETTING BODIES AND OTHER ORGANIZATIONS
Bangko Sentral ng Pilipinas (BSP) – influences the selection and
application of accounting policies by banks and other entities
performing banking functions
Cooperative Development Authority (CDA) – influences the
selection and application of accounting policies by cooperatives

Accounting policies prescribed by regulatory bodies are sometimes

referred to as regulatory accounting principles
INTERNATIONAL ACCOUNTING STANDARDS BOARD
▸Standard-setting body of the IFRS Foundation with the main
objectives of developing and promoting global accounting
standards
▸ Issue IFRS
▸ Established in April 1, 2001 as part of the International
Accounting Standards Committee (IASC) Foundation
▸ Based in London
INTERNATIONAL FINANCIAL REPORTING STANDARDS FOUNDATION
▸Non-profit organization based in Delaware, USA and is the parent
of the IASB
▸Formerly known as International Accounting Standards
Committee (IASC) Foundation until it was renamed on July 1,
2010
▸ Founded on June 1973 when it was still named IASC
▸ Established as a result of an agreement by accountancy bodies in
Australia, Canada, France, Germany, Japan, Mexico, Netherlands,
UK, Ireland and US which are the ten national jurisdictions which
consisted of the original board.
DUE PROCESS OF ADOPTING A FINANCIAL REPORTING STANDARD
1. The staff identifies and reviews issues associated with a topic
and considers the application of the Conceptual Framework to
the issues;
2. Study of national accounting requirements and practice,
including consultation with national standard-setters;
3. Consulting the Trustees and the Advisory Council about the
advisability of adding the topic to the IASBs agenda;
4. Formation of an advisory group to give advice to the IASB on the
project
5. Publishing a discussion document for public comment
DUE PROCESS OF ADOPTING A FINANCIAL REPORTING STANDARD
6. Publishing with an exposure draft a basis for conclusions and the
alternative reviews of any IASB member who opposes
publication
7. Consideration of all comments received
8. Holding a public hearing and conducting field tests, if necessary
9. Publishing a standard, including a basis for conclusions,
explaining among other things, the steps in the IASB’s due
process and how the IASB dealt with the public comments on the
exposure draft, and the dissenting opinion of any IASB member
Approved by at least 8 votes of the IASB if fewer than 14 members or by 9 if
there are 14 members
OTHER RELEVANT INTERNATIONAL ORGANIZATIONS
International Financial Reporting Interpretations Committee (IFRIC)
– a committee that prepares interpretations of how specific issues
should be accounted for under the application of IFRS where:
a) The standards do not include specific authoritative guidance
b) There is a risk of divergent and unacceptable accounting
practices
The IFRIC is composed mostly of technical partners in audit firms but
also includes preparers and users. In 2002, IFRIC replaced the former
Standing Interpretations Committee (SIC) which had been created by
the IASC. All of the SIC Interpretations have been adopted by the IASB.
OTHER RELEVANT INTERNATIONAL ORGANIZATIONS
IFRS Advisory Council (previously “Standards Advisory Council”) – a
group of organizations and individuals with an interest in
international financial reporting. Their role includes advising on
priorities within the IASBs work program. The IASB is required to
consult with the Advisory Council in advance of any board decisions
on major projects that it wishes to add to its agenda.
Members of the Advisory Council are appointed by the IFRS
Foundation which also appoints members to the IASB. These
members are drawn from different geographic locations and have a
wide variety of backgrounds, including users, preparers, academics,
auditors, analysts, regulators, and professional accounting bodies.
OTHER RELEVANT INTERNATIONAL ORGANIZATIONS
International Federation of Accountants (IFAC) – a non-profit, non-
governmental, non-political organization of accountancy bodies that
represents the worldwide accountancy profession. Its mission is to
develop and enhance the profession to provide services of
consistently high quality in the public interest. Membership to IFAC
is open to all accountancy bodies recognized by law or consensus
within their countries.

International Organization of Securities Commissions (IOSCO) – an

international body of security commissions. The Philippine SEC is a
member of IOSCO.
Changes in Reporting Standards
Changes to reporting standards are primarily made in response to
users’ needs.