CHAPTER ONE - THE ACCOUNTANCY PROFESSION

define Accountancy

is the process of identifying measuring and communicating economic information to permit informs judgment and decision by users of the information

explain identifying as a component of accounting

is the recognition or non-recognition of business activities as “accountable” events

when is a transaction accountable or quantifiable

an event is only accountable or quantifiable when it has an effect on assets liabilities and equity

explain measuring as a component of accounting

is the amounting process of assigning of peso amounts to the accountable economic transaction and events

explain communicating as a component of accounting

is the process of preparing and distributing accounting reports to potential users of accounting information

explain recording/journalizing

is the process of systematic we maintaining a record of all economic business transactions after they have been identified and measured

explain classifying

is the sorting or grouping of similar and interrelated economic transactions into the respective classes

explain summarizing

is the preparation of financial statements which include the statement of financial position income statement statement of comprehensive income statement of changes in equity and statement of cash flows

what is the overall objective of accounting

is to provide quantitative financial information about a business useful to statement users particularly owners and creditors and making economic decisions

describe the accountancy profession

is the field of work that deals with recording, analyzing, and reporting financial information. Accountants help businesses, governments, and individuals manage money, ensure compliance with laws, and make sound financial decisions.

what is the republic act no. 9298

is the law regulating the practice of accountancy in the philippines. this law is known as the philippine accountancy act of 2004

what do you understand by the board of accountancy

is responsible for preparing and grading the philippine cpa examination

explain the limitation of the practice of public accountancy

Only licensed CPAs with accreditation can practice public accountancy, and practice is limited to sole practitioners or partnerships—corporations are not allowed.

when the accreditation to practice of accountancy

Only CPAs, partnerships, or firms with BOA and PRC registration and 3 years of experience can legally practice public accountancy.

explain public accounting (cpa practices)

is composed of individual practitioners small accounting firms and large multinational organization that render independent and expert financial services to the public

explain public accounting (cpa practices)

includes maintaining the records producing the financial reports preparing the budgets and controlling and allocating the resources of entity. the major objective of this is to assist the management in planning and controlling the entities operations

explain government accounting

the process of analyzing classifying summarizing and communicating all transactions involving the receipt and disposition of government funds and property and interpreting the results thereof

explain auditing is the examination of financial statements by independent certified public accountant for the purpose of expressing an opinion as to fairness with which the financial statements are prepared

taxation service

includes the preparation of annual income tax returns and determination of tax consequences of certain proposed business endeavors

what is management advisory services

has no precise coverage but is used generally to refer to services to clients

what do you understand by continuing professional development of cpa’s

CPD is a way for CPAs to maintain and enhance their expertise, so they can provide high-quality, reliable services throughout their careers.

what is the meaning of cpd credit units

CPD credit units are the measured hours of Continuing Professional Development (CPD) activities that a Certified Public Accountant (CPA) must complete to renew their CPA license and maintain accreditation to practice public accountancy.

how many cpd units are required

120 CPD credit units are required every three years for CPA accreditation.

15 CPD credit units are required for license renewal.

what is the purpose of required cpd credit units

is to ensure that Certified Public Accountants (CPAs) continuously update and enhance their professional knowledge, skills, and competence. By completing these units, CPAs remain technically proficient, ethically aware, and capable of providing high-quality services in a constantly changing accounting and business environment.

what is the exemption of cpd requirements

is cpa shall be permanently exempted from cpd requirements upon reaching the age of 65 years. however this exemption applied only to the renewal of cpa license and not for the purpose of accreditation to practice the accountancy profession

distinguish accounting and auditing

Accounting creates financial information, while auditing examines and validates that information.

distinguish accounting and bookkeeping

Bookkeeping records financial transactions, while accounting analyzes and interprets them.

distinguish accounting and accountancy

Accounting is what accountants do, while accountancy is the profession that includes all accounting practices.

distinguish financial accounting and managerial accounting

Financial accounting reports past performance to external users, while managerial accounting provides internal reports to guide management decisions.

explain generally accepted accounting principles or GAAP

principles represent the rules procedures practices and standards followed in the preparation and presentation of financial statement

what constitute GAAP in the philippines

GAAP in the Philippines consists of the official accounting rules and standards established to guide the preparation and presentation of financial statements, ensuring they are reliable, consistent, and transparent.

what do you understand about the financial and sustainability reporting standards council

The FSRSC ensures that financial and sustainability reporting in the Philippines follows internationally aligned, high-quality standards for transparency, accountability, and comparability.

what is the composition of FSRSC

Board of Accountancy – 1

Securities and Exchange Commission (SEC) – 1

Bangko Sentral ng Pilipinas (BSP) – 1

Bureau of Internal Revenue (BIR) – 1

Commission on Audit (COA) – 1

Insurance Commission – 1

Financial Executives Institute of the Philippines (FINEX) – 1

Accredited national professional organization of CPAs:

Public Practice – 2

Commerce and Industry – 2

Academe or Education – 2

Government – 2

but you understand about the international accounting standards committee

is an independent private sector body with the objective of achieving uniformity in accounting principles which are used by business and other organization for financial reporting around the world it was formed in june 1973

what do you understand by the international financial reporting standards

has adopted in their entirety all international accounting standards and international final reporting standard

what are collectively included in philippine financial reporting standards

a. Philippine Financial Reporting Standards which correspond to International Financial Reporting Standards.

The Philippine Financial Reporting Standards are numbered the same as their counterpart in International Financial Reporting Standards.

b. Philippine Accounting Standards which correspond to International Accounting Standards.

The Philippine Accounting Standards are numbered the same as their counterpart in International Accounting Standards.

c. Philippine Interpretations which correspond to Interpretations of the IFRIC and Interpretations developed by the Philippine Interpretations Committee.