2. TOPICS
• Accounting As information System
• Accounting and Information System definitions
• Financial accounting and Management accounting
• Accounting as an aid in decision making
• Users of Informartion
• Accounting System / Cycle
• RA 9298
• CPA as a profession
5. WHAT IS “ACCOUNTING”
• PFRSC(Formerly ASC)- Accounting is a service activity. Its function is to provide quantitative
information primarily financial in nature, about economic entities that is intended to be useful in
making economic decision.
• American Accounting Associations defines accounting as the process of identifying,
measuring, and communicating economic information to permit informed judgment and
decision by users of information.
PURPOSE of
accounting
CPA’s
Primary
Purpose
6. INFORMATION SYSTEM
• The information system is defined as an integrated set of methods, procedures and means
used in order to collect, transmit and process data, analyze, store, disseminate and capitalize
information and knowledge to users of informations.
7. FINANCIAL AND MANAGEMENT ACCOUNTING
• The major distinction between financial and management accounting is the users of the information.
• Financial accounting serves external users.
• Management accounting serves internal users, such as top executives, management,
and administrators within organizations.
8. ACCOUNTING AS AN AID TO
DECISION MAKING
• Accounting information is useful to anyone who makes decisions that
have economic results.
• Investors
• Lenders
• Creditors or suppliers
• Government
• Customers
• Employees
• Managers and owners
External
Internal
9. ACCOUNTING AS AN AID TO
DECISION MAKING
• Fundamental relationships in the decision-making process:
Event
Accountant’s
analysis &
recording
Financial
Statements
Users
11. RA 9298
• Also known as the Accountancy Act of 2004
• ACCOUNTANCY has developed as a
profession attaining a status equivalent to
that of law and medicine
12. CPA AS A PROFESSION
• CPA’s in Public Practice
• CPA’s in Private Institution
• CPA’s in Government
• CPA’s in Academe
14. • Concepts
• Are the basic notions or
fundamental premises on
which accounting process is
based.
• Conventions
• Guidelines that arise from
practical applications of
accounting principles.
Conventions are not legally-
binding practice, rather it is
generally accepted based on
customs and is designed to help
accountants overcome practical
problems.
ACCOUNTING PRINCIPLES
26. ACCOUNTING CONVENTIONS
• Materiality
• Strict adherence to GAAP is not required when the items
are not significant enough to affect or influence the
decision of users.
