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Topic 1

  1. 1. CHAPTER 1: ACCOUNTING ENVIRONMENT KAL1013 BBA EXEC.(T.HAJI)
  2. 2. Objectives <ul><li>Describe what is accounting </li></ul><ul><li>Describe types of business organization </li></ul><ul><li>State the characteristics of the qualitative accounting information </li></ul><ul><li>State the users of accounting information </li></ul>KAL1013 BBA EXEC.(T.HAJI)
  3. 3. Outline <ul><li>Definition </li></ul><ul><li>Purposes, Fields, Professional Bodies, Ethics and Regulations </li></ul><ul><li>Types of Business </li></ul><ul><li>Characteristics of Qualitative Accounting Information </li></ul><ul><li>Users of Accounting Information </li></ul>KAL1013 BBA EXEC.(T.HAJI)
  4. 4. Definition of Accounting <ul><li>Kieso and Weygandt (1996) “ process of identifying, recording and communicating economic activities of the organization to the users of the information.” </li></ul><ul><li>Warren, Reeve & Fess “..an information system that provides report to stakeholders about the economic activities… </li></ul><ul><li>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.” </li></ul>KAL1013 BBA EXEC.(T.HAJI)
  5. 5. Accounting: Definition KAL1013 BBA EXEC.(T.HAJI) Measuring Identifying Recording Reporting Interpreting Analyzing Bookeeping Designing Information Provide useful information to users
  6. 6. Purpose of Accounting <ul><li>Provide useful information to users. </li></ul><ul><li>Provide assistance in decision making. </li></ul><ul><li>Performance evaluation tools. </li></ul><ul><li>Controlling purposes. </li></ul>KAL1013 BBA EXEC.(T.HAJI)
  7. 7. Fields in Accounting KAL1013 BBA EXEC.(T.HAJI) Accounting Financial Accounting Management Accounting Auditing Tax Public Sector Accounting And Non-Profit Organisation Accounting Information System
  8. 8. Accounting Professional Bodies KAL1013 BBA EXEC.(T.HAJI) MICPA MIA MASB FRF Malaysia
  9. 9. Ethics in Accounting <ul><li>         Integrity </li></ul><ul><li>         Objectivity </li></ul><ul><li>         Independence </li></ul><ul><li>         Confidentiality </li></ul><ul><li>         Professional competence and due care </li></ul><ul><li>         Compliance with technical standards </li></ul><ul><li>         Professional behavior </li></ul>KAL1013 BBA EXEC.(T.HAJI)
  10. 10. Regulations in Accounting <ul><li>Companies Act 1965 </li></ul><ul><ul><li>S: 167 (Accounts to be kept) </li></ul></ul><ul><ul><li>S: 169 (Profit and loss account, balance-sheet and directors' report) </li></ul></ul><ul><ul><li>Ninth Schedule (Detail of accounts) </li></ul></ul><ul><li>Financial Reporting Act 1997 </li></ul><ul><li>Financial Reporting Standards </li></ul>KAL1013 BBA EXEC.(T.HAJI)
  11. 11. Types of Business <ul><li>Perniagaan tunggal (Sole proprietor) </li></ul><ul><li>Perniagaan perkongsian (Partnership) </li></ul><ul><li>Syarikat berhad. (Limited companies) </li></ul>KAL1013 BBA EXEC.(T.HAJI)
  12. 12. Difference between businesses KAL1013 BBA EXEC.(T.HAJI) 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
  13. 13. Characteristics of Qualitative Accounting Information <ul><li>Timeliness (ketepatan masa) </li></ul><ul><li>Relevance (relevan) </li></ul><ul><li>Reliable (boleh dipercayai) </li></ul><ul><li>Comparable (boleh dibandingkan) </li></ul><ul><li>Easy to understand (boleh difahami)  </li></ul>KAL1013 BBA EXEC.(T.HAJI)
  14. 14. Users of Accounting Information KAL1013 BBA EXEC.(T.HAJI) Users Internal External Managers Direct Interest Indirect Interest Investors Potential Investors Creditors Regulatory Agencies Inland Revenue Dept. Customers
  15. 15. Thank You KAL1013 BBA EXEC.(T.HAJI)

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