Kenneth Jorge A. Esparagoza BSA-1 AC - 501 The accounting regulations harmonisation phases are: 1.

Napoleon's laws phase from 1807 (Code de Commerce) 2. Directives phase from 1978 (Directive IV and VII) 3. US GAAP accounting standard and the International Accounting Standards (IAS) phase since 1995. The results of the research in the regulations harmonisation development in the EU have shown that in the late last century, the member countries were intensively transforming their accounting regulations based on the EU Directives (IV and VII) according to the International Accounting Standards. Definition Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers.[1] The communication is generally in the form offinancial statements that show in money terms the economic resources under the control of management; the art lies in selecting the information that is relevant to the user and is reliable. [2]The principles of accountancy are applied to business entities in three divisions of practical art, named accounting, bookkeeping, and auditing.[3] Accounting is the art of describing, measuring and interpreting economic activity. Accounting is commonly known as the language of business. The accounting process involves working with industrywide accounting principles and concepts, also known as GAAP (generally accepted accounting principles). Purpose/Functions of accounting Keeping track of transactions and recording revenue and expenses are important business processes often assigned to an accounting department or a financial manager.The goal of accounting is to keep track of cash inflows and outflows. It is used on an as-needed basis by transaction recorders (bookkeepers) and decision makers such as stockholders and managers. To achieve the basic purpose of accounting, computers, video displays, accounting software, financial statements and accounting journals may be used. The goal is to make budgets, projections, financial reports, highlight areas of profitability or loss and provide factual information about the entity's state of finances. What is the purpose of financial statements? There are two main purposes of financial statements: (1) To report on the financial position of an entity (e.g. a business, an organisation); (2) To show how the entity has performed (financially) over a particularly period of time (an "accounting period"). The most common measurement of "performance" is profit. It is important to understand that financial statements can be historical or relate to the future.

the uses and users of accounting information External users includes financial accountants from outside the business Internal users, including magerial accountants from inside the business financial accountants are external users individuals from outside the business. Potential Investors and tax authorities.

 External users are regulatory authorities , suppliers , customers , bankers and compertitors managerial accountants are internal users and work inside the business owner of the business(sole owners , partners , shareholders) , managers of the business and employees of the business branches of accounting The two main branches of accounting are managerial accounting and financial accounting. Managerial accounting refers to the processes and procedures implemented for internal decision-making and reporting within an organization. Financial accounting refers to the fundamental guidelines, policies, procedures and regulations mandated by the Generally Accepted Accounting Principles (GAAP), which has been established by the Financial Accounting Standards Board (FASB) (see Resources). relationship of accounting w/ other fields of specialization Accounting is a very broad field with several different branches. The field of accounting covers the duties of bookkeeping and auditing, as well as taxation and financial accounting. Accountants can pursue studies in lean, management, cost and financial accounting, or they can choose to study public, external or internal accounting. Accounting also as a forensic and social branch, which both play an important role in society developments. Outside of the United States, accountants can become chartered accountants, where they become members under a Royal Charter to work in British territories and Ireland. Chartered accountants can work publicly or in a private accounting practice. The American Accounting Association defines auditing as a systematic process of objectively obtaining and evaluating the accounts or financial records of a governmental, business, or other entity based on established criteria. While auditing focuses largely on financial information, the process also may involve examination of nonfinancial documents that reveal information about a business's conduct. Handled by a trained accountant, an audit and the auditor's report provide additional assurance to users of financial statements that the information presented in financial statements is accurate, and can help companies assess their performance and their compliance with applicable regulations.

TYPES OF AUDITORS There are three types of auditors: internal, governmental, and external (i.e., independent auditors or certified public accountants). Internal auditors are employees of the organization whose activities are being examined and evaluated during an independent audit. The primary purposes of internal auditing are to review and assess a company's policies, procedures, and records and to review and assess a company's performance given its plans, policies, and procedures. Therefore, internal auditors review financial records and accounting systems, assess compliance with company policies, evaluate the efficiency of company operations, and assess the attainment of company goals BOOKKEEPING Before computers were in common use, bookkeeping was done by an actual bookkeeper. This person kept a company's day-to-day financial records by manually recording every business transaction into a journal. The journal entry included the date, the name of the accounts to be debited and credited, and the amounts. The bookkeeping process further required that all journal amounts be rewritten in (or "posted" to) the company's general ledger and subsidiary ledger accounts.

With the writing and rewriting of so many amounts (as well as the manual calculations) it was realistic to assume that some errors would occur in the bookkeeping process The following are six areas of specializations one would expect a management accountant to be able to perform in an effective and efficient manner in compliance with Generally Accepted Accounting Principles (GAAP): 1. Accounting Information System. Management accountant in this area designs and implements manual and computerized accounting systems to gather managerial information for better management practices. 2. Financial Accounting. Based on the accounting data prepared by the financial accountant, management accountant prepares various reports and financial statements, and helps in analyzing, operating, investing, and financial decision making for management effectiveness and efficiency. 3. Cost Accounting. The cost of producing or providing services must be measured. Further analysis is also done by an accountant working with management to determine whether the products and services are being produced in the most cost-effective manner. 4. Budgeting. In the budgeting process, a managerial accountant helps management develops a financial plan which positively impacts profitability and improves cash flow. 5. Tax Accounting. Instead of hiring a public accountant, a company may use its own managerial accountant. For example, one may focus on tax planning, preparation of tax returns, and dealing with the Internal Revenue Service and other governmental agencies. 6. Internal Auditing. Internal auditors review the operating and accounting control procedures adopted by management to make sure controls are adequate and are being followed. Managerial accountant may also monitor the accuracy and timeliness of the reports provided to management and to external parties for accuracy and compliance with rules and regulations in accordance with GAAP. opportunities in the accountng profession Accountants can work with the government, individuals, accounting firms and corporations. Their job is to ensure the accuracy of financial records, pay taxes properly and on time, and analyze and communicate financial information. Accountants also offer budget analysis, financial and investment planning, information technology consultation, and some legal services. There are three different types of accountants, all with specific job duties. Public accountants take part in accounting, auditing, and tax and consulting services for corporations, governments, non-profit organizations and individuals. Some public accountants concentrate only on tax matters for clients while others perform external audits, informing the appropriate authorities that statements have been correctly prepared and reported. Public accountants can become Certified Public Accountants (CPAs) and usually work for public accounting firms or own their own businesses. Management accountants record and analyze financial information for the companies for which they work. They also take responsibility for budgeting, performance evaluation, cost management and asset management within the company. Management accountants can act as part of a team involved in product development, as they forecast the company's projected sales and other necessary data by analyzing and interpreting financial information. Management accountants are never restricted to one area of work within a company and can take part in many activities at once, such as cost accounting or financial analysis. Government accountants are employed by the federal, state and local governments to maintain and examine the financial records of government agencies. This type of accountant may work for the Internal Revenue Service (IRS) or in financial management, financial institution examination, or budget analysis and administration. Recent technological developments have led to the use of special software packages designed for accountants. This software reduces much of the tedious work in data management and record keeping previously done by accountants. As a result of these recent developments, accountants can now use computers to access clients' information via the Internet or databases, making their jobs easier. The need for troubleshooting in the accounting software department has also led many accountants to take on the responsibility of testing and correcting problems with this software. Accountants can be found working in their home or office. Government accountants may need to travel to meet with various agencies or to perform audits. Most accountants work a typical 40-hour

week, but may be forced to work longer hours if they have multiple clients, are self-employed or are particularly busy during tax seaso

Sole proprietors are unincorporated businesses. They are also called independent contractors, consultants, or freelancers. There are no forms you need to fill out to start this type of business. The only thing you need to do is report your business income and expenses on your Form 1040 Schedule C. This is the easiest form of business to set up, and the easiest to dissolve. (An LLC with only a single shareholder, a so-called single-member LLC, is taxed as a sole proprietor on a Schedule C.) Corporations are incorporated businesses. Every form of business besides the sole proprietor is considered a separate entity, and this often provides a measure of legal and financial protection for the shareholders. The shareholders of corporations have limited liability protection, and corporations have full discretion over the amount of profits they can distribute or retain. Corporations are presumed to be for-profit entities, and as such they can have an unlimited number of years with losses. Corporations must have at least one shareholder. Partnerships are unincorporated businesses. Like corporations, partnerships are separate entities from the shareholders. Unlike corporations, partnerships must have at lease one General Partner who assumes unlimited liability for the business. Partnerships must have at least two shareholders. Partnerships distribute all profits and losses to their shareholders without regard for any profits retained by the business for cash flow purposes. (LLCs are taxed as partnerships, unless they choose to be taxed as corporations.)S-Corporations have features similar to a partnership. An S-corporation must have at least one shareholder, and cannot have more than 100 shareholders. If any shareholder provides services to the business, the S-Corp must pay that shareholder a reasonable salary. This salary is a separate payment from distributions of profits or losses.

Week 2 history Accountancy has its roots in the earliest history of civilization. With the rise of agriculture and trade, people needed a way to keep track of their goods and of transactions. Around 7500 B.C., Mesopotamians began using clay tokens to represent goods, such as animals, tools, food items or units of grain. This helped owners keep track of their property. Instead of counting heads of cattle or bushels of grain every time one was consumed or traded, people could simply add or subtract tokens. Different shapes were used for different goods. Around 4000 B.C. Throughout much of ancient history and the Middle Ages, accountancy remained a fairly simple affair. The adoption of coinage meant that accounting now dealt with money rather than actual goods, but single-entry bookkeeping, much like that used in modern check registers, was used to keep track of money exchanged, where it went and who owed what. During and after the Crusades, European trade markets opened up to Middle Eastern trade, and European merchants, especially in Genoa and Venice, became increasingly wealthy. They needed a better way to keep track of large amounts of money and complex transactions, and this led to the development of double-entry bookkeeping. Double-entry bookkeeping means that each transaction is recorded at least twice, as a debit from one account and a credit to another With the advent of the Industrial Revolution in the late eighteenth and early nineteenth centuries, accounting developed further and came into its own as a profession. The practice of cost accounting became prevalent as business owners and managers sought to understand how best to make their businesses as cost efficient as possible. Josiah Wedgwood, the owner of the famous English pottery factory, was among the first to use cost accounting to understand what his company's money was being spent on and to eliminate unnecessary spending Classical, Stewardship, and Market Perspectives on Accounting: A Synthesis Abstract: Business organizations can be classified into three broad categories: entrepreneurial organizations without management hierarchy, entrepreneurial organizations with managerial hierarchy, and large publicly-held corporations. The key difference between the first two is the presence of agency problem, and the key difference between the last two is the presence of stock markets. Three major models of accounting, bookkeeping, managerial and financial reporting, have been engineered to suit the respective needs of the three forms of organizations. Using the work of Hatfield (1924), Barnard (1938), Simon (1947, 1952), and Cyert and March (1963), the paper explores the links between organization theory and classical bookkeeping, stewardship and capital markets perspectives on accounting. Keywords: Accounting; Bookkeeping; Stewardship; Stock markets; Organization design The Commercial Revolution was a period of European economic expansion, colonialism, and mercantilism which lasted from approximately the 16th century until the early 18th century. It was succeeded in the mid-18th century by the Industrial Revolution. Beginning with the Crusades, Europeans rediscovered spices, silks, and other commodities rare in Europe. This development created a new desire for trade, and trade expanded in the second half of the Middle Ages. European nations, through voyages of discovery, were looking for new trade routes in the 15th and 16th centuries, which allowed the European powers to build vast, new international trade networks. Nations also sought new sources of wealth. To deal with this new-found wealth, new economic theories and practices were created. Because of competing national interest, nations had the desire for increased world power through their colonial empires. The Commercial Revolution is marked by an increase in general commerce, and in the growth of non-manufacturing pursuits, such as banking, insurance, and investing

Schmalenbach - - everyones problem led to the creation of his book. The Model Chart of Accounts. This book develop the accounting in germany.

Schmalenbach was born in Halver in 1873. He entered Leipsig College of Commerce in 1898. His success there earned a call and subsequently a professorship at Cologne. His teaching, research, journal-editing and publications prospered before and after World War I, when the College of Commerce formed part of the new university. His reputation grew through his pupils, his consultancies and membership of official commissions. From many such activities, he retired in 1933, but his reputation long protected him and his Jewish wife from the Nazis. Eugen died in 1955, and his wife shortly after. Frequently Schmalenbach produced "price" as his secret planning weapon. In 1918, it was to be the moderator for the slumps and booms which had bedevilled the economy of previous decades. Informed management should react quickly to overheating and raise their prices. The profits then earned should be reserved, tax-free, for release to cover overheads when prices had been reduced to the point where they covered marginal costs only. The tactic has been adopted in Sweden and remains open when demand cannot be shifted through anticipation and stock-building. Structural inflexibilities and labour costs at artificial exchange rates would seem to be greater concerns today than the variations round equilibrium of earlier concern. Marginal Costing was a tactic advocated early and late by Schmalenbach. His first publication urged that costs should not be apportioned to centres and then aggregated to selling stage and price: rather, prices available on highly segmented markets should have costs progressively deducted for all the resources consumed in their production. The proposal is derived without acknowledgement from Wiesers "Natural Value" of 1889. It was later elaborated as an alternative to marginal cost cumulation whenever there were constraints or scarce factors. Thus Marginal utility (which approximated net realisable value) had a role in allocating production and rewards in external markets and for internal decisions. Our themes must seem incompatible even in the Accountancy section of a congress devoted to the mathematical modelling of economies. And our chronicling will report doctrines from Cologne which consistently over the decades opposed planning in favour of disseminated information and decisions decentralised to the consumer, to the firm or even through quasi-markets within the firm. Schmalenbachs beliefs robustly held until his death in 1955 will differ from the assumptions of many papers here presented, as from the socio-political doctrines professed in East Europe until very recently. "Socialism" has faced more systematic alternatives; but our interest here will be to show how straight dichotomies did not prove acceptable earlier in the Century. Consequently our care will be to show adaptation, learning indeed, in turbulent times with some themes continuing as possible contributions in the extending period "after Schmalenbach". Our first concern is with biography and biographers. CONSOLEDATED FINANCIAL STATEMENTS In recent decades, the developments in company law, and the issue of national and international accounting standards, has increased the amount of information that needs to be disclosed in financial statements. However, users of the financial statements should bear in mind the limitations of consolidated financial statements resulting from the legal requirements, accounting policies and limits on the information available at the time the financial statements were prepared. Users of consolidated accounts should be aware of the laws and accounting conventions under which the accounts have been compiled, as these may affect the figures in the financial statements. For example, such consolidated accounts normally use more than one method to consolidate the results of subsidiaries, associates which are not controlled, and portfolio shareholdings. The user should be acquainted with the particular method of accounts preparation used in the jurisdiction whose laws and regulations are applicable. The results of a subsidiary company would be consolidated with the results of the parent company. A subsidiary company would normally be defined as one which is controlled by the parent company of the group, by reason of shareholding above 50%, voting power or some other factor. This means that the assets and liabilities of the subsidiary would be incorporated with those of the rest of the group on the balance sheet, and the revenue and expenses consolidated in the group profit and loss account, with adjustments for intragroup revenue and expenses. However, a company in which the parent company has significant influence, but does not have control, for example an associated company in which the parent company has at least a 20% shareholding, would normally be included in the consolidated financial statements using the equity method. Under this method, the investment in the associate would be initially recorded at cost, and then adjusted for the changes in the groups net share of

the assets of the company. There would not be full consolidation of the income, expenses and assets of the associated company with the group.