Download - Chapter 1- Accounting Environment- Note
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KE1013 Chapter One 1
CHAPTER 1: ACCOUNTING
ENVIRONMENT
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KE1013 Chapter One 2
Outline
Definition
Purposes, Fields, Professional Bodies, Ethics and
Regulations
Types of Business
Characteristics of Qualitative AccountingInformation
Users of Accounting Information
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KE1013 Chapter One 3
Learning objectives: Define what is accounting?
Describe the role of accounting?
Describe the profession of accounting & theaccounting professional/governing body?
Explain the importance of ethical conduct
Explain types of business.
State the characteristics of qualitative accountinginfo.
State the users of accounting?
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KE1013 Chapter One 4
Definition of Accounting Kieso and Weygandt (1996) process of
identifying, recording and communicating
economic activities of the organization to theusers of the information.
Generally accepted definition: accounting is the
process of identifying, measuring, summarizingand communicating economic information topermit informed judgments and decisions byusers of the information.
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KE1013 Chapter One 5
Accounting: Definition
Measuring Identifying
Recording Reporting
Interpreting Analyzing
Bookeeping
Designing Information
Provide useful
information
to users
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KE1013 Chapter One 6
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
Accounting
and Non-Profit
Organization
Accounting Information
System
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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
S: 169
Ninth Schedule
Financial Reporting Act 1997
Accounting Standards (FRSs)
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Types of Business Organization
Perniagaan tunggal (Sole proprietor)
Perniagaan perkongsian (Partnership)
Syarikat berhad. (Limited companies)
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Difference between businessesSole
Proprietor
Partnership Public
Company
Management Owner Partners BOD
Liability Unlimited Unlimited Limited
Profit Unlimited According to
agreement
Dividend on
shares.
Tax Owners
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
ManagersDirect
Interest
Indirect
Interest
Investors
Potential Investors
Creditors
Regulatory Agencies
Inland Revenue Dept.
Customers