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FINANCIAL ACCOUNTING AND REPORTING FOR SERVICE PROVIDERS AND MERCHANDISERS MODULE 2 Chapter 2 Financial Accounting for Service Providers and Merchandisers Author Professor Zenaida Manuel  st Business...

FINANCIAL ACCOUNTING AND REPORTING FOR SERVICE PROVIDERS AND MERCHANDISERS MODULE 2 Chapter 2 Financial Accounting for Service Providers and Merchandisers Author Professor Zenaida Manuel  st Business BusinessAnd AndAccounting Accountingininthe the21 21stCentury Century Professional Professional Ethical Ethical Values, Values, Skills Skills Accounting Accounting Regulatory Regulatory Standards Standards and and and Areas and Bodies The The framework framework Bodies and and Good Good Knowledge Knowledge Career Career Fields Fields Associations Associations governance governance SUPPORTING THE PRACTICE OF THE ACCOUNTING PROFESSI ON  Learning Outcomes a. describe how businesses are coping up with the current changes taking place in the business environment. b. discuss the skills and knowledge that a 21st- century professional must possess. c. discuss the innovations in the accounting curriculum by virtue of Resolution No. 231-2017 dated March 28, 2017. d. identify the different accounting career fields, services and courses. d. explain the roles of the regulatory bodies and professional accounting associations. e. discuss important provisions of the Accountancy Act of 2004 and the 2021 amended version. f. explain the importance of the conceptual framework of accounting and its components g. explain corporate governance, business ethics, and the code of professional conduct. h. discuss sustainability vis-a-vis social accounting and environmental Do it HOW TO ADDRESS THESE THREE BIG ISSUES? FORESIGHT AND PROMPT RESPONSE TO CHANGE FOR CLIMATE CHANGE- ENVIRONMENTAL SUSTAINABILITY CORPORATE GOVERNANCE FOR DISINFORMATION AND MISINFORMATION INFLATION COULD BE ADDRESS BY GOOD COST LEADERSHIP, CIRCULAR PRODUCTIN FLOW AND JUST IN TIME INVENTORY MANAGEMENT  QUALITIES OF A GLOBAL COMPETITIVE PROFESSIONAL Effective Communication Skills. Integrity Positive Attitude Adaptability and Flexibility. Creative and Innovative. Critical Mind. Interpersonal Skills. Stronger Qualities are needed such as: Resiliency. This is a quality relevant in this day and age which makes one aware of the adverse situations taking place and is strong enough to bounce back and move on without predetermined plans. You keep going until you find the solution. Discernment- One must have a vision, understand the situation, make acute judgement, analyze the situation and act wisely. Collaborative teamwork- combine skills and expertise and work as a cohesive group to enhance productivity, solve problems and achieve the firm’s goal  Let’s do it!! Ex 2 page 40. THE PRESENT- DAY ACCOUNTANT Wears many business hats… strategic planning, budgeting, and control. Expected to assist the firm as planner, economic forecaster, financial analyst, and systems analyst aside from the traditional practice as external or internal auditor. The objective is to develop accountants with specialized skills and with more practical experience and mind. Read pages 28 to 29 for the four Bachelor’s degree program: BSA BSMA BSAIS BSIA  Career Fields in Accounting The accountant renders professional service in the following major fields of work: Public accounting Industry or private accounting Government and not for profit accounting Research and education Offers services as: auditors, tax consultant, forensic officer, management consultant, finance officer, budget officer, cost accountant, controller, EDP head, bookkeepers DO IT ! Read pages 28 to 30 Solve ex. 3 and 4  CAREER FIELDS (read pages 29 to 30) PUBLIC ACCOUNTING- A career field open to accounting professionals offer their services to the public as : CPAs, Internal Auditors, Management Accountants, AIS Specialists, Tax Consultants, Certified Public Accountants (CPAs) specialize in tax forms, balance statements, and other forms of financial documentation that their clients are required to submit or disclose. As auditor, one must first pass the Certified Public Accountant Licensure Examination given by the Professional Regulation INDUSTRY ACCOUNTING (also called Private Accounting) Employed in private firms, the accountants render services as financial accountant, controller, budget officer, internal auditor, electronic data processing head, tax officer and cost accountant. Government (COA< BSP< NBI>BOC) – works as Treasurer, Auditor, Analyst, Forensic Accountant RESEARCH AND EDUCATION- Dean, Vice Dean, Chairperson, researcher, accounting professor. ORGANIZATION SET UP- FINANCE DEPT FUNCTIONS OF THE MANAGEMENT ACCOUNTANT: 1.ASSISTS IN THE DESIGN AND IN THE IMPLEMENTATION THE AIS 2.PREPARES AND SUBMITS SPECIAL REPORTS 3.CVP ANA, Pricing, Budgeting, FSA, 3. MAKES SPECIAL ANALYSES= Drop a product, change product, eliminate a dept/branch, change price  Let’s do it!!! page 41 Ex 4 Accounting Courses pages 30 to 31 Accounting courses are ladderized starting from the basic course called bookkeeping, it goes up step by step for the following courses: Financial Accounting Conceptual Framework and Standards Intermediate Accounting Cost Accounting Management Accounting Advanced Financial Accounting and Reporting Auditing Government Accounting Tax Accounting Let’s do page 41 Ex 5 Forensic Accounting it!!! PROFESSIONAL REGULATORY BODIES  Professional Regulation Commission  Board of Accountancy  Phil Institute of Certified Public Accountants- national professional body of accountants  SEC, BSP, BIR STANDARD SETTING BODIES (Under PICPA formulate, promulgate and interpret ) Philippine Financial Reporting Standards Council Philippine Accounting Standards Council Interpretation INTERNATIONAL ACCOUNTING STANDARDS BOARD PROFESIONAL ACCOUNTING ASSOCIATIONS- UNDER PICPA NACPAE, GACPA, ACPACI, AIA, ACMA, IFA, AFA,CAPA Let’s do  it!!! Ex 6 page 41-42  The The Code Code ofof Ethics Ethics for for Professional Professional Accountants, Accountants, issued issued by by the the International International Federation Federation of of Accountants Accountants (IFAC), (IFAC), govern govern the the activities activities of of professional professional accountants accountants worldwide. worldwide. In In addition addition to to competence, competence, objectivity, objectivity, independence, independence, and and confidentiality, confidentiality, the the IFAC’s IFAC’s code code deals deals with with the the accountant’s accountant’s ethical ethical responsibilities responsibilities in:in: Taxes Taxes Independence Independence Fees Fees and and commissions commissions Advertising Advertising and and solicitation solicitation Handling Handling of of monies monies Cross-border Cross-border activities. activities. ETHICAL STANDARDS  Corporate Governance The The system system byby which which aa company company is is directed directed and and controlled. controlled. Board Board of of Incentives and Directors Directors monitoring for Top Top To pursue Management objectives of Management Stockholders Stockholders  Corporate An An effective effective should Governance corporate corporate governance governance system system should also also protect protect the the interests interests of of the the company’s company’s other other stakeholders. stakeholders. Employees Employees Customers Customers Creditors Creditors Suppliers Suppliers And And the the communities communities in in which which the the company company operates. operates.  GOOD GOVERNANCE DO IT Read pages 37 and 38. And answer the following: Explain what is good governance. Explain the effects of lack of good governance to the employees, customers and the public. Give the guidelines contained in the revised code of Corporate Governance DO IT Solve ex 7 and 8 page 42 DO IT Read pages 38, 39 on sustainability and answer no 9  SOCIAL ACCOUNTING  ENVIRONMENTAL ACCOUNTING DO IT Accountancy Act of 2004 PROPOSED ACCOUNTANCY ACT OF 2021 pages 34 to 35 FINANCIAL STATEMENTS AND the ACCOUNTING FRAMEWORK FINANCIAL STATEMENTS CONCEPTUA ACCOUNTING L STANDARDS FRAMEWORK READ pages 35 to 36 What is CFW, its relevance, and objectives? DO IT Solve ex 18 page 60 Basic Accounting Principles Monetary Unit Assumption – include in the accounting records only transaction data that can be expressed or measured in terms of money. Economic Entity Assumption – requires that activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities. BASIC ACCOUNTING PRINCIPLES Objectivity Principle- dictates that transactions should be verifiable and substantiated by documents such as official receipts when collecting cash from clients and customers. Going Concern Principle- assumes that the business will be operating for an indefinite period of time not just for a month or a year.  Basic Accounting Principles Cost Principle (Historical) – dictates that companies record assets at their cost. Reported at cost when purchased and also over the time the asset is held. Cost easily verified, whereas market value is often subjective. Fair value information may be more useful. Basic Accounting Principles Reporting Period- transactions are recorded and financial statements prepared for a period usually one year- January to December (calendar period) or ending other than December 31 (fiscal period). Accrual Principle- assets, liabilities, revenues and expenses should be recorded at the time period they relate or took place regardless of when cash is collected or paid. Do it!! Solve ex 19 pages 60-61 Prof Zenaida VC Manuel Financial Accounting and Reporting Part 1 For Service Providers and Merchandisers END OF MODULE 2