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    Topic 1 Accounting Environment

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    Safinah Hassan
    By the end of this topic, you should be able to: 1. Explain the meaning, role and importance of accounting; 2. Identify the users and branches of accounting; 3. Describe the main functions of professional accounting bodies in Malaysia; 4. Assess the qualitative characteristics of fi nancial information, assumptions, principles and constraints in accounting; 5. Apply the accounting equations; and 6. Analyse transactions based on the accounting equation

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    Topic 1 Accounting Environment

    Uploaded by

    Safinah Hassan
    87 views9 pages
    By the end of this topic, you should be able to: 1. Explain the meaning, role and importance of accounting; 2. Identify the users and branches of accounting; 3. Describe the main functions of professional accounting bodies in Malaysia; 4. Assess the qualitative characteristics of fi nancial information, assumptions, principles and constraints in accounting; 5. Apply the accounting equations; and 6. Analyse transactions based on the accounting equation

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    By the end of this topic, you should be able to: 1. Explain the meaning, role and importance of accounting; 2. Identify the users and branches of accounting; 3. Describe the main functions of professional accounting bodies in Malaysia; 4. Assess the qualitative characteristics of fi nancial information, assumptions, principles and constraints in accounting; 5. Apply the accounting equations; and 6. Analyse transactions based on the accounting equation

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    87 views9 pages

    Topic 1 Accounting Environment

    Uploaded by

    Safinah Hassan
    By the end of this topic, you should be able to: 1. Explain the meaning, role and importance of accounting; 2. Identify the users and branches of accounting; 3. Describe the main functions of professional accounting bodies in Malaysia; 4. Assess the qualitative characteristics of fi nancial information, assumptions, principles and constraints in accounting; 5. Apply the accounting equations; and 6. Analyse transactions based on the accounting equation

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    ACCOUNTING ENVIRONMENT

    TOPIC 1

    INTRODUCTION TO ACCOUNTING

    Definition of Accounting

    Accounting is a process to identify, measure, record and present the economic information of and entity to the user in order to help them make evaluation or economic decision Internal users

    Users of accounting Information

    Direct access to the company involved in the management of the entity management of the company

    External users

    Parties who do not direct access to the resources of the company and not involved in the management of the company

    INTRODUCTION TO ACCOUNTING

    Branches of Accounting
    Financial Accounting Management Accounting Auditing Taxation

    INTRODUCTION TO ACCOUNTING

    Difference between Financial Accounting and Management Accounting


    Financial Accounting Management Accounting
    Preparation of financial and non-financial information that are required by parties in the company for planning, evaluating and controlling purposes of the operations of an entity Report is produced at any time based on requirement and is not subject to any standard or format

    Preparation of report

    Preparation of financial reports of an entity for external and internal users but focus is given to the external users.

    Standard or Format

    Financial reports produced are periodically and in accordance to specified standard or format.

    INTRODUCTION TO ACCOUNTING

    Professional Accounting Bodies in Malaysia

    Malaysia Institute of Accountants (MIA)


    To set the required qualification in order to become member To provide training and education for practitioners or those who are interested becoming accounting practitioners To control accounting practices in Malaysia To protect accounting interest in Malaysia

    The Malaysian Institute of Certified Public Accountants (MICPA)


    To advance the accounting theries and practies in all aspects To train and evaluate the competent members To ensure the independence of professional accountant To oversee the practices and professional conducts of its members

    INTRODUCTION TO ACCOUNTING

    Professional Accounting Bodies in Malaysia (cont)

    Malaysian Accounting Standard Board ( MASB)


    To set and approved new accounting standard To revise or accept the usage of existing standard as approved accounting standard To develop the conceptual accounting framework

    Financial Reporting Foundation (FRF)


    To provide opinion to MASB on matters to be implemented To evaluate the performance of MASB To be responsible for the overall funding of the operation of MASB including to approve its budget

    FUNDAMENTAL ACCOUNTING CONCEPT

    Qualitative Characteristics of Accounting Information

    Qualitative characteristics of accounting information refer to the characteristics that must be present in the accounting information to make it useful

    Primary Relevance
    Feedback Value Forecast Value Timeliness Reliability Verifiable Objective Trustworthy

    FUNDAMENTAL ACCOUNTING CONCEPT

    Qualitative Characteristics of Accounting Information (cont)

    Secondary

    Comparability Consistency

    Accounting Assumptions
    Assumption of Separates Entity Assumption of Going Concern Assumption of Monetary Unit Assumption of Accounting Period

    FUNDAMENTAL ACCOUNTING CONCEPT

    Basic Principle of Accounting


    Principle of Historical Cost Principle of Income Recognition

    Percentage of Completion method Cash Basis Method First step Second step

    Principle of Matching

    Principle of Full Disclosure

    Accounting Constraints
    Cost-Benefit Relationship Materiality

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