Podcast
Questions and Answers
What is the role of the Financial Reporting Standards Council (FRSC)?
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?
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 body was formed to promote the uniformity in accounting principles globally?
Which organization is NOT involved in supporting IASC standards in the Philippines?
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)?
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?
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)?
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?
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?
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?
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?
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?
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?
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?
What does the term 'financial character' refer to in accounting definitions?
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What aspect of accounting does the 'communicating' component emphasize?
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?
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.
