Hi guys,..how hav u been?!today i wanna share u some basic info of accounting.
hopefully useful !
Accountancy
or accounting is the art of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms that show the economic resources under the control of management.
Etymology
The English term accountant is derived from accomptant, which was pronounced by dropping the 'p' and over time further changed in pronunciation and spelling. Accomptant was derived from the French compter, itself originating from the Latin computare. From the word accountant the term accountancy is derived.
Types of accounting
* Financial accounting is "a major branch of accounting involving the collection, recording and extraction of financial information, and the summary of it in the form of a periodic profit and loss account, a balance sheet and a cash flow statement in accordance with legal, professional, and capital market requirements".
* Management accounting is another branch of accounting performed within an organization to provide information only accessible to its decision-makers.
* Open-book accounting is an accounting principle that aims to improve accounting transparency of organizations.
* Tax accounting is the accounting needed to comply with jurisdictional tax regulations.
* Accounting scholarship is the academic discipline which studies the theory of accountancy.
The related, but separate financial audit comprises internal audit and external audit. External audit—carried out by independent auditors—examines the financial statements and accounting records in order to express an opinion as to the truth and fairness and adherence to Generally Accepted Accounting Principles (GAAP). Commonly used GAAP include the US Financial Accounting Standards Board (FASB), which issues FASB Pronouncements including Statements of Accounting Standards, and the International Accounting Standards Board (IASB), which issues International Financial Reporting Standards (IFRS). Many other countries have instituted local standards resulting in a local country GAAP. Internal audit aims at providing information for management usage, and is typically carried out by employees.
Accounting scandals
The year 2001 witnessed a series of financial information frauds involving Enron Corporation, auditing firm Arthur Andersen, the telecommunications company WorldCom, Qwest and Sunbeam, among other well-known corporations. These problems highlighted the need to review the effectiveness of accounting standards, auditing regulations and corporate governance principles. In some cases, management manipulated the figures shown in financial reports to indicate a better economic performance. In others, tax and regulatory incentives encouraged over-leveraging of companies and decisions to bear extraordinary and unjustified risk.
The Enron scandal deeply influenced the development of new regulations to improve the reliability of financial reporting, and increased public awareness about the importance of having accounting standards that show the financial reality of companies and the objectivity and independence of auditing firms.
In addition to being the largest bankruptcy reorganization in American history, the Enron scandal undoubtedly is the biggest audit failure.The scandal caused the dissolution of Arthur Andersen, which at the time was one of the five largest accounting firms in the world.It involved a financial scandal of Enron Corporation and their auditors Arthur Andersen, which was revealed in late 2001. After a series of revelations involving irregular accounting procedures conducted throughout the 1990s, Enron filed for Chapter 11 bankruptcy protection in December 2001
One consequence of these events was the passage of Sarbanes-Oxley Act in 2002, as a result of the first admissions of fraudulent behavior made by Enron. The act significantly raises criminal penalties for securities fraud, for destroying, altering or fabricating records in federal investigations or any scheme or attempt to defraud shareholders.
Hmm....that's all for now, many thanks to wikipedia.
ok,.see ya!
