CHAPTER 1: ACCOUNTING ENVIRONMENT

KAL1013 BBA EXEC.(T.HAJI)

Objectives

Describe what is accounting Describe types of business organization State the characteristics of the qualitative accounting information State the users of accounting information

KAL1013 BBA EXEC.(T.HAJI)

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)

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.

KAL1013 BBA EXEC.(T.HAJI)

Accounting: Definition
Measuring Identifying
Bookeeping Recording Reporting

Interpreting

Analyzing

Designing Information
KAL1013 BBA EXEC.(T.HAJI)

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.

KAL1013 BBA EXEC.(T.HAJI)

Fields in Accounting
Financial Accounting Accounting Information System

Accounting
Management Accounting Auditing Tax Public Sector Accounting And Non-Profit Organisation

KAL1013 BBA EXEC.(T.HAJI)

Accounting Professional Bodies

MICPA Malaysia

MIA

MASB

FRF

KAL1013 BBA EXEC.(T.HAJI)

Ethics in Accounting
Integrity Objectivity Independence Confidentiality Professional competence and due care Compliance with technical standards Professional behavior
KAL1013 BBA EXEC.(T.HAJI)

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

KAL1013 BBA EXEC.(T.HAJI)

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Types of Business

Perniagaan tunggal (Sole proprietor)

Perniagaan perkongsian (Partnership) Syarikat berhad. (Limited companies)

KAL1013 BBA EXEC.(T.HAJI)

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Difference between businesses

Sole Proprietor Partnership
Partners Unlimited According to agreement

Public Company
BOD Limited Dividend on shares.

Management Liability Profit

Owner Unlimited Unlimited

Tax
Regulation

Owners income Partners income Tax based on the tax tax profit of the co.
None Agreement, Partnership Act 1961.
KAL1013 BBA EXEC.(T.HAJI)

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)

KAL1013 BBA EXEC.(T.HAJI)

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Users of Accounting Information

Users

Internal Managers Direct Interest

External Indirect Interest Regulatory Agencies Inland Revenue Dept. Customers 14

Investors Potential Investors Creditors

KAL1013 BBA EXEC.(T.HAJI)

Thank You

KAL1013 BBA EXEC.(T.HAJI)

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