Questions and Answers
What is the role of the Financial Reporting Standards Council (FRSC)?
What is the maximum validity period for a certificate of registration issued to CPAs?
Which body was formed to promote the uniformity in accounting principles globally?
Which organization is NOT involved in supporting IASC standards in the Philippines?
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Which of the following describes Generally Accepted Accounting Principles (GAAP)?
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What significant change occurred in 1981 concerning accounting standards in the Philippines?
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What was a primary objective of the International Accounting Standards Committee (IASC)?
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Which of the following factors does NOT support the utilization of IAS in the Philippines?
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What is the primary function of accounting as described in the definitions provided?
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Which component does NOT belong to the accounting process as defined?
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Who has the authority to promulgate rules affecting the practice of accountancy in the Philippines?
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Which of the following is NOT a recognized area of public accounting?
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What is required for a certificate of accreditation to be issued to a CPA in public practice?
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What does the term 'financial character' refer to in accounting definitions?
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What aspect of accounting does the 'communicating' component emphasize?
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Which of the following statements about the Republic Act No. 9298 is incorrect?
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Study Notes
Definition of Accounting
- Accounting is a service activity providing quantitative financial information about economic entities.
- Aims to assist in making informed economic decisions for users such as owners and creditors.
Key Components of Accounting
- Identifying: An analytical process to recognize relevant transactions and events.
- Measuring: The technical aspect of quantifying financial transactions.
- Communicating: The formal dissemination of financial information to users.
Purpose of Accounting
- To deliver quantitative financial information that aids stakeholders in making informed economic choices.
Philippine Accountancy Act of 2004 (Republic Act No. 9298)
- Regulates the practice of accountancy in the Philippines.
- Defines the powers and responsibilities of the Board of Accountancy (BOA).
Board of Accountancy (BOA)
- Authorized body to regulate and establish rules within the accounting profession in the Philippines.
- Responsible for overseeing public, private, and government accounting sectors.
Public Accountancy Regulations
- Single practitioners and partnerships must be certified public accountants (CPAs) in the Philippines.
- A certificate of accreditation is granted to CPAs with a minimum of three years of relevant experience.
- The Securities and Exchange Commission (SEC) does not register corporations for public accountancy.
Accreditation Requirements for Public Accountancy
- CPAs and accounting firms must register with BOA and the Professional Regulation Commission (PRC).
- Certificates of registration are valid for three years and must be renewed with fees.
Generally Accepted Accounting Principles (GAAP)
- Encompass rules and conventions governing accounting practices.
- Provide the framework for preparing and presenting financial statements.
Accounting Standards Council (ASC)
- Established in 1981 to develop financial accounting standards in the Philippines.
- Issues standards including Philippine Accounting Standards (PAS) and Philippine Financial Reporting Standards (PFRS).
Financial Reporting Standards Council (FRSC)
- Replaced the ASC, responsible for creating and maintaining accounting standards in the Philippines.
International Accounting Standards Committee (IASC)
- Founded in 1973 to standardize accounting principles globally for financial reporting.
- Develops International Accounting Standards (IAS) for consistent financial statement presentation.
Objectives of IASC
- Formulate and promote accounting standards for global application and acceptance.
- Strive for harmonization and improvement of regulations and accounting practices.
Considerations for Using IAS in the Philippines
- Support from organizations like SEC, BOA, and PICPA in adopting IASC standards.
- Increased globalization of business creating a demand for a common reporting language.
- Ongoing enhancements to international accounting standards to reduce variances in treatment.
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Description
Explore the foundational definitions and principles of accounting as a service activity. Understand how accounting functions to provide quantitative financial information that aids in economic decision-making. Delve into the art of recording and interpreting financial transactions.
