this is in management one so this is your module one or week one chapter end of this lesson you will be able to Define accounting describe the nature of accounting narrate the history or the origin of accounting Define external users and gives examples and also to Define internal users and give examples also the different definitions of accounting first accounting is a service activity so it's actually to provide quantitative information primarily Financial in nature about economic entity that is intended to be useful in making economic resections also it is an information system that measures processes and communicate financial information about an economic Institute it is also defined as a process of identifying measuring and communicating economic information to permit informed judgments and Decisions by users of these information that is based on these AAA or the American accounting Association something is commonly called the language of business so we're in it delivers financial information to different users of financial statements so along this slides you will know who are the users of the financial statement next it is also defined based on the American Institute of certified public accountants so this is aicpa it is an art of recording classifying and summarizing in a significant Manner and in terms of managed transactions and events which are important of at least a financial character and interpreting the resources also this definition all of this definition will provide a better understanding of accounting in terms of following so you have um considered an art exercise involved in interconnected phases concerned with transactions and events Financial having Financial indirectly so in accounting business transactions are expressed in terms of money in accounting interprets and results of the financial statement So based on the definition of accounting we can derive the following basic features of a company or the nature of accounting first it is a service activity so accounting provides assistance to decision makers by providing them Financial reports that will guide them in coming up with sound decisions accounting is also a process why because process refers to the method of performing any specific job step by step according to the objectives or Target so accounting is identified as a process as it performs the specific test of collecting processing and communicating financial information so in doing so follow some definite steps like the collection recording classification summarization finalization and reporting of financial data also accounting is both an art and discipline so it is the art of recording classifying summarizing and financial data right so the word art here the word art refers to the way something is performed so it is behavioral knowledge involving a certain activity or creativity and skill to help us attain some specific objective accounting is a systematic method consisting of definite techniques in its proper application requires skills and expertise Now by Nature accounting is an arts and because it follows certain standards and professional ethics to also a discipline so for the history of accounting so accounting is as old as civilization itself so it has evolved in response to various social and economic needs of money accounting started a simple recording or repetitive exchanges so the history of accounting is often seen as indistinguishable from the history of finance and businesses following is the evolution of accounting so first we have here the cradle of civilization so around 3600 BC record keeping was already common from Mesopotamia China and India to Central and South America so the oldest evidence of this practice was the um what we call this the clay tablet okay so the clay tablet of Mesopotamia which deals with commercial transactions at that time as listing or listing of accounts receivable and accounts payable Then followed by the 14th century the double entry bookkeeping which we are following right now so 14 at the Double Entry bookkeeping so the most important events in accounting history is generally considered the building discrimination of Double Entry bookkeeping by look up actually so look up actually is considered as the father of accounting important century where in Italy so fashioni was um revered in this day and was a friend and contemporary of Leonardo da Vinci Leonardo da Vinci is very famous the Italians of the 14th to 16th centuries are widely acknowledged as the fathers of modern accounting and where the first to commonly used Arabic numerals rather than humans so for tracking business accounts wrote from the arithmetica okay so that that was the first book published that contained a detailed chapter on the double entry the sweeping so this is very important the double entry book we see next is the French Revolution um around 1700 so the thorough study of accounting and development of accounting Theory began during this period so social upheavals affecting government finances lost customs and business had greatly influenced the development of accounting then you have viewed the Industrial Revolution so this is from 1762 1830 so mass production and the great importance of six assets so we're giving attention during this period Then the 19th century so the beginnings of modern Accounting in Europe and America so the modern the formal accounting profession emerged in Scotland in 1854 so when Queen Victoria granted a royal Charter to The Institute of accountants in Glasgow so creating the profession of the charted accountant or the city so in the late 1800s um Chartered Accountants from Scotland and became came to the U.S to all that British investment so some of these accountants stayed in the U.S setting up accounting practices and becoming the origins of several U.S accounting firms so the first national U.S accounting Society was set up in 1887 so the American station of public accountants was the Forerunner to the current the eicpa or the what is called the American Institute of certified public content so in this period rapid changes in accounting practice and reports were made in Accounting Standards to be observed the economic professionals where promoting sets a notable process such as mergers Acquisitions and drugs of multinational corporations were developed in amateur is when one company takes over all of the operations or another business entity resulting in the distribution of another business so business expanded by acquiring another company so these types of transactions have challenged accounting professionals to develop newspounders that will address accounting issues related to this business combination so and of course the president we have the development of modern accounting standards and commerce or the accounting profession in their 20th century developed around state requirements for financial business audits so beyond the industry's self-regulation the government also sets Accounting Standards so through what through loss and agencies such as the Securities in Exchange Commission or what we call the sex every economics worldwide continued to globalize accounting regulatory bodies required accounting practitioners to observe International Accounting Standards so this is still assure transparency and reliability and to obtain greater confidence on account information used by the Global Investors so nowadays investors seek investment opportunities all over the world to remain competitive businesses everywhere feel the need to operate globally so the trend now for accounting professionals is to observe one one single set of global economic funders in order to have greater transparency and comparability of financial data across borders so around Global okay who are the users of account information so who uses accounting data so there are two broad categies of user Senator information you have here internal users and external history so internal users have account information and those individuals inside a company of plan organize and run the business so this user is are directly involved in managing and operating the business so this includes our marketing managers production supervisors Finance directors company officers and of course the owners so what information will user needs that can be answered to the accounting so these internal users are what we call the primary users of account information include the following management employees and owners so for management the information needed are those income or earnings for the period those sales available cash production costs and the decisions will be supported is to analyze the organization's performance and position and take appropriate measures to improve the company resource efficiency of cash to pay dividends to stockholders and pricing decisions for employees so the information needed is a profit for the period salary spacing plugins and the decisions to be supported is the job security um the consider staying in the employee of the company or look for other employment opportunities so that's what the employees need why they need the account information also for the owner um the owner needs information for a profit or income for the presidential resources or assets of the business liabilities as a business so for the decisions will be supported so this is the consideration for the owners regarding additional investment expanding the business borrowing funds to support any expansion plan so accounting information is presented to the internal users so to the management employees owners usually in the form of management accounts budgets forecast and financial statements so this information will support whatever decision of these internal research and for the external users so these are individuals and organizations outside the company who want financial information about the company need help these users are not directly involved in managing and operating services unlike the internal users so the two most common sites as a single users are potential investor and Credit Service so potential investors use account information to make decisions to buy shares of a company and creditors here the creditors such as suppliers and bunkers use accounting information two evaluate the risk of granting credit or lending the money so also included as internal users are government regulatory authorities such as sex or the Security and Exchange Commission the bir are the Bureau of internal revenue the department of labor and employment or the dollar the SSS a social security system and the ldus or the local governments in it so external users clear Eternal users of account information include the following year the creditors so creditors for again for determining the credit worthiness of an organization so terms of credit are set by creditors according to the assessment of their customers financial help so creditors include suppliers as well as lenders of Finance such as Banks also for the tax Authority so we have there we are so for determining the credibility of the tax returns filed on behalf of the company again also the investor so investors is one of the three most common types of finale for yourself this is for analyzing the feasibility of investing in a company so investors want to make sure they can earn a reasonable return on their investment before they commit any Financial resource to the company also customers is for assessing the financial profession of its suppliers which is necessary for them to maintain a stable source of Supply in the long term so or about business and also the regulatory authentication what I have said you have their set not only so it is for ensuring that the company's disclosure of the company information is in accordance with the rules and regulation set in order to protect the interest of the stakeholders who um rely on such information informing their business decisions so our last slide is the types of information needed by each group of users so accountant information includes both Financial or quantity settings and non-financial or qualitative information used by the decision makers so first for the qualitative analysis so it means listening as the intangible and for quantitative in the word quantitative so it means looking at the actual numbers and for comprehensive analysis it should include both the qualitative and quantitative analysis or factors that would impact the decision later so that's all for your week one topic so you wait for Earth topic for yours which says for the last topic for this week is a part of information needed by each group of users accounting information includes both Financial or quantitative and non-financial or qualitative information used by the decision maker so qualitative analysis means listening is intangible quantitative from the word quantity means Looting of the actual numbers and of course comprehensive analysis it should include meeting at the both qualitative and quantity satisfacturers that would impact decisions later so from these are all topics or the company competencies you need to cover it or acquire for your week one topic for sub and one so you wait for our next video for the weekly topic