Okay, hello mga students. Welcome back sa ating klase, sa ating mga video discussions or yung tinatawag ko ng mga video lectures. Pag-usapan po natin sa video lecture na ito, dalawang key points, identifying what are some of the common branches of accounting and to introduce to you the practice of accountancy by introducing the four sectors. under your RA 9298. Actually, sa discussion na ito, hindi ko po talaga uupuan or hindi natin pag-uusapan yung RA 9298. But the focus is only on the four sectors as an introductory discussion for purposes of basic financial accounting.
So, yun yung ating target. Meron pang minor topic here, which is the comparison between the bookkeeping and accounting. So, paano ba yun? Nagkakaiba.
Okay, so sa isa kong video lecture, pero ito po ay higher accounting kasi under my cost accounting, if I'm not mistaken. I have compared the three types of accounting. Yung tinatawag natin na financial accounting, the management accounting, and also the cost accounting. But since this is a higher accounting subject, so definitely hindi nyo pa po ito na-encounter. Pero...
I will explain to you briefly what are the differences in line with our discussion of the common branches of accounting. So, this is where we start, the first three. Let's talk about financial accounting.
This one, okay? When we are talking of financial accounting, let's read what it says here. Preparation of financial information primarily oriented to external parties.
So when we are talking of financial accounting, the purpose is general. General purpose. Because the function or the process of accounting, the end goal, the end product is a general purpose financial statement.
In our previous video lectures, I explained to you that the output of our accounting cycle or accounting process following our IPO model is your financial statements. Ito yung ating output, diba? Now, under your financial accounting, ang nakikreate po natin is a general purpose. Pag sinabi nating general purpose, for the general consumption. Not intended for a specific individual or specific stakeholder.
Okay? And this is being governed by the Philippine Financial Reporting Standards, o yung tinatawag natin ng mga PFRSS. Meron tayong introduction discussion about the Philippine Financial Reporting Standards on a later video as we wrap up all the other topics in our basic accounting.
Pag-usapan po natin yung introduction to Philippine Financial Reporting Standards. So let's talk about it eventually. Okay, so that is the financial accounting. This is a branch of accounting.
This is an accounting discipline na yung purpose is for the external users. Na-explain ko din sa inyo, diba? Yung iba't-ibang klase ng mga users. Samantalang, pagdating naman po dito sa management accounting, kung kanina ang pinag-uusapan natin, external parties, eto naman for internal parties.
So that the end goal, the end product, is being utilized for internal purposes. Now, sa isa kong video, let's when I explain to you the difference between the external and the internal users. I have a slide about this one. Let's read it again.
Although my point here is this last two paragraphs. Because the needs of the users of the financial statements are different. So for external, we can only provide a general purpose.
Yun nga lang, pagdating sa internal reporting within the company, yung mga managers, yung mga may-ari, they are the internal users, kinakailangan nila itong mga financial statements natin, yung product, produkto ng ating accounting process, para magamit sa pagpaplano, pagkokontrol, lahat ng mga decision-making activities kung saan importante na malaman natin kumusta yung lagay ng ating negosyo. That's why we have management accounting. And the information that is being extracted, that is being provided for these internal users are usually specialized.
Kaya nga ang tawag natin dyan, ay sorry, hindi ko na-edit. This is not general purpose. Kung hindi, ayan, ano, special purpose.
Ano ba naman yan? Hindi ko napansin yun ah. Hindi tuloy naging smooth yung aking discussion.
Nakonsyus tuloy ako dito sa general. This is not general purpose, but special purpose. Kasi specialized na yan.
Depende sa request ng mga users. Okay? So ang tawag natin dyan, management accounting. Meron tayong tinatawag ng management advisory services, which is an offshoot of the management accounting or managerial accounting. Meron po tayong separate na board, exam subject, yung management services na tinatawag natin.
And this will be tackled. Yung mga concepts, mga accounting topics related sa managerial accounting ay nasa isang higher accounting subject. Okay? Now, if this is a special purpose, these are not being governed by PFRSS.
Okay? That's the second one. Yan po yung magkontra.
Or it's not a contract, it's a tandem, but on the opposite side, the financial accounting and then the management accounting. In the middle, we have the cost accounting. But before we proceed to that, look at the comparison of financial accounting to managerial accounting.
Financial accounting's focus is the organization as a whole. But if it's managerial, it can be whole, it can be parts. And usually, it's just portions.
Kasi dito, limbawa, kung ano lang yung kailangan ng manager or ng may-ari, o bigyan mo nga ako ng financial report for a specific period of time or for a specific division or department. Okay? Usually, ang financial accounting, historical yan.
Okay? We are looking at the costs, kung ano man yung mga naging actual, limbawa, mga acquisition costs, no? Ng ating mga property, plant, and equipment. Okay? Pero pag managerial accounting, not only historical but forward-looking.
And we are compliant with the generally accepted accounting principles following your financial accounting. Pero not necessarily under your managerial accounting. Kaya nga, diba?
Sa ipinakita ko sa previous slides, okay? Yung financial accounting is being governed by the Philippine Financial Reporting Standards. Samantalang yung managerial accounting, not necessarily. Okay?
So I hope it's clear. Now, we have what we call financial accounting. We have what we call financial reporting. Although they are being used interchangeably, but when we say financial reporting, there are other information that is included other than our basic financial statements. But usually, they are being used interchangeably.
That's why sometimes, what is the objective of financial reporting? Okay? There. Now, the third branch of accounting is cost accounting. And as you can see in my illustration, it's in the middle.
Because it addresses the demands of both financial accounting and management accounting by providing product cost information. From the word itself, cost accounting, the concern of this branch of accounting is more of the costs. Paano ba minamanage yung cost? For planning, controlling, decision-making, and performance evaluation. Kaya po, sa mga higher accounting, meron tayong subject na cost accounting or cost accounting and control.
Okay? So, pag-uusapan din po ninyo yan sa higher accounting subject. Or pag-uusapan natin yan kung ipa-follow ninyo yung mga video lectures ko on cost accounting.
Okay? Just to add, no? Pag cost accounting, this is a systematic recording and analysis. Systematic, organized pa rin.
May system tayo na sinusodan. Of the costs of materials, labor, and overhead, incident to production. Now, hindi kina kailangan na maintindihan nyo talaga siya ng lubusan. At least sa ngayon, napafamiliarize kayo sa mga iba't ibang branches ng accounting. And eventually, we will cross the bridge when we get there.
Mayintindihan po natin yan. Okay, so we have three. Financial accounting, management accounting, cost accounting.
Ano-ano pa kaya? Okay, here are the other branches of accounting. Auditing.
Maybe some of you have heard of this word, auditing. When we are talking of auditing, it deals with the evaluation of correspondence of certain assertions or yung tinatawag natin ng mga management representations against established criteria and expressing an opinion thereof. This will be tackled on a higher accounting subject. Marami po kayong ma-encounter na subject on auditing.
Ibat-ibang. subject sa auditing. Pero isang field pa po yan sa accounting.
I myself, sa previous work experiences ko, naging auditor ako. Yung mga nagtatrabaho sa auditing field ay mga auditors. Meron din tayong tinatawag na tax accounting. So pag tax accounting, taxation naman ang kanyang specialty. Or yung discipline is into taxes.
So it deals with the preparation of tax returns and rendering of tax advices. For example, I have a company that I will build. What are my possible exposures or tax consequences if I build this kind of business?
And providing advices. Sometimes, it's tax consultancy. Another form of tax services. But tax Accounting is the preparation of tax returns.
Kaya po, meron din kayong separate na subject, higher accounting subject on income taxation. Ayan. Government accounting. Pag government accounting naman, nakafocus sa gobyerno.
Kasi medyo unique. May separate na accounting for the government. So, it refers to the accounting for the government and its instrumentalities.
Pag sinabi natin mga instrumentalities, kasi... Yung government, hindi lamang po ito yung mga national government at saka yung mga local government units. Kasama po dito sa mga instrumentalities, yung mga government-owned and controlled corporations, or yung tinatawag natin ng GOCCs.
Okay? Ano ang focus ng government accounting? Dito po is more on the custody and administration of public funds.
The purpose for which those funds are committed? and the responsibility and accountability of the individuals entrusted with those funds. Meron din po kayong separate na higher accounting subject on government accounting. Ayan.
Next, fiduciary accounting. Na-encounter po natin itong fiduciary sa isa nating lecture. When we are talking of fiduciary accounting, it refers to the handling of accounts minamanaged ng isang person na ipinagkatiwalaan sa kustodiya at pagmamanage ng mga properties for the benefit of another parties.
Alimbawa, meron akong lupain or meron akong mga economic resources. I cannot manage it because I am too busy for certain reasons. Now, I call upon a person, okay, which is an independent party at sa kanya ko ipinagkatiwala, pakimanage nga nitong properties na ito.
And then, okay, any halimbawa, any income. Kung kumikita man yan, yung kita niyan, i-donate natin sa isang organization, for example. So that is fiduciary accounting.
The handling of accounts na minamanage ng isang person na pinagkatiwalaan para i-manage for the custody of that accounts. That is what we call fiduciary accounting. Meron din tayong estate accounting.
Pagdating sa estate accounting, patay na. Ayan. Yung tao na nagmamayari ng mga properties or yung mga accounts na yan.
Okay? So it refers to the handing for fiduciaries who wind up the affairs of a deceased person. Alimbawa, mayaman ka. Ano? Marami kang pera.
Tapos, syempre, hindi mo naman madadala sa hukay. ang kayamanan mo. Maiiwan ito sa mga anak mo, sa mga heirs mo. Okay?
So kapag namatay ka, merong mag-takeover para i-manage, okay, i-wind up yung affairs ng mga, okay, yung mga properties mo for proper distribution. Okay, that is what we call estate accounting. Yung discipline na yun. Meron din tayong tinatawag na social accounting. or social and environment accounting or social responsibility reporting.
Okay, eto, medyo... Pausbong na branch of accounting because we are, yung mga tao sa ngayon, yung mga business organization ay medyo aware na sila sa impact ng kanilang mga negosyo sa environment. Kasi alimbawa, they are into nuclear or medyo hazardous na mga activities.
Mining, explorations. So, meron tayong tinatawag na social and environment accounting or social responsibility reporting, which involves the process of communicating the social and environmental effect of an entity's economic action to society. So, parang, ano no, pwede nating may associate or may connect yung mga terms na stewardship, corporate social responsibility. Ayun.
Okay? So, that we call it... social accounting. Now, meron din tayong tinatawag na institutional accounting. Pag sinabi natin na institutional accounting, it pertains to the accounting for non-profit entities maliban sa government.
Okay? Other than the government. And usually, ano, accounting for government and not for profit organizations, excuse me, or non-profit entities, ay nagiging ano, no?
pinagsasama sa isang higher accounting subject. Okay? Pero kapag ang accounting natin ay pinag-uusapan, ang focus natin ay yung mga non-profit entities, we are referring to the institutional accounting.
Okay? Government accounting, pag sa gobyerno, pero pag mga non-profit organizations like mga asosasyon, mga foundations, we are referring to institutional accounting. Okay?
Much of that topics, yung mga... concepts nito will be discussed in a higher accounting subject. Introduce lang natin ano yung mga branches of accounting. But the details, hindi na natin kailangan upuan sa ngayon.
Okay? Kasi nag-uumpisa pa lang naman kayo. Accounting systems.
Okay. According to Sussmilan, this is another branch of accounting. And it refers to the installation of accounting procedures for the accumulation of financial data and designing of accounting forms to be used in data gathering.
We're already computerized nowadays. Electronic. Not man-to-man.
Because of the technology that is around us. So accounting is evolving. It's also developing.
For the work to be good, for the life of accountants to be easier, we have accounting systems. Processing becomes electronic to make it easier. You also have a separate subject, which is an accounting information system.
And that's where you study. yung mga concepts on accounting systems. Ayan. And we also have the accounting research. Ito normally mas associated sa academe, sa education, sa mga schools.
Kasi sila talaga yung mga involved sa academic research. If you are an accountancy graduate, if you are a CPA, you are teaching in the academe, in the schools, you will be exposed to accounting research. And when we are talking of accounting research, of course, our target here is, our research is into accounting.
It pertains to the careful analysis of economic events and other variables to understand their impact on decisions. Accounting research includes a broad range of topics. So, there are many things that can be discussed here.
It may relate to one or more. Pwede yung a combination of one or more branches of accounting, yung economy as a whole, or the market environment. Usually sa mga public universities, mga state universities and colleges, tapos ikaw ay permanent, required po sa kanila yung mga permanent faculty members na dapat meron silang research na ginagawa for a certain period of time. So these are some of the branches of accounting.
For other authors, you may encounter other branches of accounting. If you encounter others, please let us know. You can comment in the comment section. So that if someone is watching this and studying, they can see. Oh, here it is.
For example, we hear forensic accounting. How is that? Okay, but since yung aking...
The reference for this discussion is that of the book of Sus Milan. So I just limited our discussion to what is in the book. But maybe other authors have other things to say. Okay?
Oh, this is the accounting cycle, following the combined accounting definition from the American Accounting Association and the American Institute of Certified Public Accountants. Now, we have what we call bookkeeping. And when we are talking of bookkeeping, remember, this is the process.
Because if you haven't watched it yet, we're just about to go, especially to the new students. nag-aaral pa lang ng basic accounting, papunta pa lang tayo sa recording business transactions. So, you will be introduced to these processes, itong recording, ayong journalizing, posting, preparation of trial balance. Now, ito yung tinatawag kasi natin na bookkeeping.
Yung proseso ng pagre-record ng mga accounts or transactions of an entity, at kadalasan ay nagtatapos sa pag-prepare ng ating trial balance. at Pero hindi po nito kasama yung interpretation phase. Although, as you will soon learn, after the adjusting process, nagpe-prepare ulit tayo ng trial balance, pero yung adjusted trial balance. So kasama po yan sa ating bookkeeping phase. Okay?
Pag accounting kasi, encompassing itong lahat na ito. Itong accounting process na ito, for accounting and more. It includes the interpretation and some other similar or related disciplines.
So bookkeeping is basically the process of recording transactions until we prepare the summary. So please take note, bookkeeping versus accounting. Now, as a last part of this video lecture, let me introduce to you the four sectors in the practice of accountancy under your RA 9298, otherwise known as the Philippine Accountancy Act of 2004. Now, doon po makikita po ninyo, kung sakaling kayo ay mga accountancy students, enrolled kayo sa BS in Accountancy, Bachelor of Science in Accountancy, after you graduate, kung pinalad kayo na makapagtapos sa program na ito, at kapag kayo ay nag-take ng board exam at pumasa at naging certified public accountant, pwede po kayong magtrabaho sa apat na sektor na ito.
You can work in public practice, commerce and industry, academia, and government. Let's start with public practice. Because usually, for BSA graduates, and eventually CPAs, they are here to work in public practice.
This is more of the practice of what they learned in accountancy, including auditing and other consultancy services. Basta it is a public practice kung saan they render, audit, or accounting-related services to more than one client on a fee basis. Kaya po dito ma-encounter ninyo or maririnig ninyo yung iba't-ibang mga accounting firms like SGV, Islalipan, or PWC, KPMG, Deloitte, Reyes, Antacandong, at marami pa po diba. Dito po sila sa public practice.
O kaya naman, ikaw ay isang independent practitioner. Or mayroon kang kakilala, kamag-anak na nagpa-practice ng kanyang accountancy. Okay? May mga sarili siyang kliyente. Hindi siya empleyado.
Kung hindi, mayroon siyang sariling negoso. At yung pagiging accountant niya, pinapractice niya yun, kasama siya dito sa public practice. Pagdating kasi dito sa commerce and industry, ang usapan natin dyan, ikaw ay empleyado ng isang private company.
Okay? Employment in the private sector. or in a position kung saan, ikaw ay isang accountant nila.
Pwede ang cost accountant, pwede ang management accountant, pwede ang financial analyst. Okay? Pwede kang, ano na, CPA na working in the company.
Pinapasahod ka nila. You are part of the commerce and industry. Private practice din ang tawag natin dyan.
Now, kung sakaling manawa ka na dyan sa public practice or commerce and industry at naisip mo, gusto ko nalang magturo, pumunta na. pumunta ka sa school. O kagaya ko. Okay, after seven years, yata, no?
From public practice to commerce and industry, lumipat na ako sa academe kasi feeling ko, mas happy ako, nag-i-enjoy ako sa pagtuturo. Ayan, no? Dito ako sa academe ngayon. Or yung education. Working for the universities, for the schools.
And teaching, accounting, auditing, management accounting, finance, business law, taxation, and other technically related subjects. Okay? So, yung mga accounting instructors, mga professors ninyo, they are also part of the academe. Okay? Pero karamihan kasi sa mga teachers ngayon, accounting teachers, meron silang full-time work either sa public practice or sa commerce and industry and then nagtuturo sila as a part-time instructor.
Okay? So pwedeng ganoon din. Now, panghuli, kung gusto mong manilbihan sa gobyerno, pwede kang magtrabaho sa kanila as a CPA in the government.
Halimbawa, in the commission of audit in the BIR. in the Banko Sentral ng Pilipinas, in the Securities and Exchange Commission, or kahit saan ang gobyerno, ahensya ng gobyerno, tapos ikaw ay CPA, at nagtatrabaho ka, part ka ng accounting department nila, for example, or accounting unit, basta meron kang appointment to a position in the government, kasama na rin ha, yung sinasabi ko kanina ng mga instrumentalities, yung mga government-owned and controlled corporations, kasi CPA ka, working in the government, Okay? So, you are part of the government. Ayan.
So, these are the four sectors in the practice of accountancy. Okay? In terms of the RA-9298, sa higher accounting, pag-uusapan po ninyo yung batas na ito at kung ano yung nakapaloob dito. Okay?
So, hanggang dito lamang po yung ating discussions for the common branches of accounting. Tapos yung maiksing discussions sa bookkeeping versus accounting. And then, the last one, the four sectors of the accountancy profession.
Let me know if you have any questions. This is it for my video lecture. Until next time, in our next video lectures.
Bye-bye!