KAL1013 BBA EXEC.(T.HAJI) 1 CHAPTER 1: ACCOUNTING ENVIRONMENT
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KAL1013 BBA EXEC.(T.HAJI) 1
CHAPTER 1: ACCOUNTING ENVIRONMENT
KAL1013 BBA EXEC.(T.HAJI) 2
Objectives Describe what is accounting Describe types of business organization State the characteristics of the qualitative
accounting information State the users of accounting information
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Outline
Definition
Purposes, Fields, Professional Bodies, Ethics and
Regulations
Types of Business
Characteristics of Qualitative Accounting
Information
Users of Accounting Information
KAL1013 BBA EXEC.(T.HAJI) 4
Definition of Accounting
Kieso and Weygandt (1996) “ process of identifying, recording and communicating economic activities of the organization to the users of the information.”
Warren, Reeve & Fess “..an information system that provides report to stakeholders about the economic activities…
Generally accepted definition: “accounting is the process of identifying, measuring, summarizing and communicating economic information to permit informed judgments and decisions by users of the information.”
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Accounting: Definition
Measuring Identifying
Recording Reporting
Interpreting Analyzing
Bookeeping
Designing Information
Provide useful information to users
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Purpose of Accounting
Provide useful information to users.
Provide assistance in decision making.
Performance evaluation tools.
Controlling purposes.
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Fields in Accounting
Accounting
Financial Accounting
Management Accounting
Auditing Tax
Public Sector AccountingAnd Non-ProfitOrganisation
Accounting InformationSystem
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Accounting Professional Bodies
MICPA MIA
MASB FRF
Malaysia
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Ethics in Accounting
Integrity
Objectivity
Independence
Confidentiality
Professional competence and due care
Compliance with technical standards
Professional behavior
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Regulations in Accounting Companies Act 1965
S: 167 (Accounts to be kept) S: 169 (Profit and loss account, balance-sheet
and directors' report) Ninth Schedule (Detail of accounts)
Financial Reporting Act 1997 Financial Reporting Standards
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Types of Business
Perniagaan tunggal (Sole proprietor)
Perniagaan perkongsian (Partnership)
Syarikat berhad. (Limited companies)
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Difference between businesses
Sole Proprietor Partnership Public Company
Management Owner Partners BOD
Liability Unlimited Unlimited Limited
Profit Unlimited According to agreement
Dividend on shares.
Tax Owner’s income tax
Partners’ income tax
Tax based on the profit of the co.
Regulation None Agreement, Partnership Act 1961.
Companies Act 1965, MA, AA
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Characteristics of Qualitative Accounting Information
Timeliness (ketepatan masa)
Relevance (relevan)
Reliable (boleh dipercayai)
Comparable (boleh dibandingkan)
Easy to understand (boleh difahami)
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Users of Accounting Information
Users
Internal External
Managers DirectInterest
IndirectInterest
Investors
Potential Investors
Creditors
Regulatory Agencies
Inland Revenue Dept.Customers
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Thank You
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