FABM - Quiz 3

Internal Users

Individuals within the organization who use financial information to make decisions.

Owners

Use financial information to assess the profitability and viability of their investment.

Management

Uses accounting information to set goals, evaluate progress, and make operational decisions.

Employees

Use financial information to assess the company's stability and their job security.

External Users

Individuals or organizations outside the company who use financial information for decision-making.

Business Organizations and Individuals

Use financial information for purposes like negotiating contracts or partnerships.

Potential Investors

Use financial information to decide whether to invest in a company.

Present and Potential Creditors and Lenders

Use financial information to decide whether to loan money to a company.

Present and Prospective Customers

Use financial information to assess the company's ability to provide products or services long-term.

Government Sector

Government agencies that use a company's financial information.

Tax Authorities

Use financial information to determine the correctness of a company's tax payments.

Regulatory Authorities

Use financial information to ensure the company complies with laws and regulations.

Financial Accounting

The branch primarily concerned with the recognition, measurement, and communication of economic activities through the preparation of general-purpose financial statements.

Management Accounting

The branch that deals with the preparation and analysis of accounting information for the internal use of management.

Cost Accounting

The branch concerned with the recording, presentation, and analysis of the total cost of manufacturing a product.

Government Accounting

The branch that deals with the recording of the inflow and outflow of government funds.

Tax Accounting

The process of preparing, analyzing, and presenting tax returns and payments for taxing authorities.

Auditing

The process of independently examining and evaluating financial statements to give them credibility.

Financial Auditing

The examination of financial statements by an independent CPA to express an opinion on their fairness per GAAP.

Operational Auditing

The process of determining the accuracy and reliability of accounting data and adherence to policies.

Compliance Auditing

The evaluation to ensure an organization follows external laws, rules, and regulations.

System Auditing

The evaluation performed to improve the efficiency and effectiveness of a system.

Accounting Education

The branch that deals with developing future accountants through a relevant academic curriculum.

Accounting Research

The branch that focuses on the search for new knowledge in any area of the accounting field using the scientific method.

AICPA

American Institute of Certified Public Accountants

PICPA

Philippine Institute of Certified Public Accountants

GAAP

Generally Accepted Accounting Principles

CPD

Continuing Professional Development

IFRS

International Financial Reporting Standards

Accounting (as an art)

Refers to the way something is performed; accounting is an art as its proper application requires skill and expertise.

Accounting (as a science)

Involves a disciplined, methodical approach; accounting is a science as practitioners adhere to professional and ethical standards.