CONCEPTUAL FRAMEWORK AND ACCOUNTING STANDARDS (AE 14)

LEARNING MATERIAL

UNIT NUMBER/ HEADING: MODULE 1/INTRODUCTION TO ACCOUNTING

LEARNING OUTCOMES:
At the end of the unit, the students will be able to:
a. Define accounting and understand better and deeply the
accountancy profession;
b. Understand the generally accepted accounting principles;
c. Trace the history of the International Accounting Standards
Board;
d. Illustrate the IASB structure and identify each structure’s
function;
e. Understand and explain the need for accounting standards.

INTRODUCTION:
Accounting has evolved, as in the case of medicine and law, in
response to the social and economic needs of society. As business and
society become more complex, accounting develops new concepts and
techniques to meet the ever-increasing needs for financial information.
Without such information, many complex economic developments and social
programs may never have been undertaken.
Accounting is relevant in all walks of life and it is absolutely essential
in the world of business. Accounting is the system that measures business
activities, processes that information into reports and communicates the
results to decision-makers. Accounting quantifies business communication.
For this reason, accounting is called the language of business. The task of
learning accounting is very similar to the task of learning a new language;
thus, the need for this module to fully understand the accounting profession
and the standard-setting bodies that regulate the practice of the
accountancy profession.

Topic 1: THE ACCOUNTANCY PROFESSION

Learning Objectives:
At the end of the topic, the students will be able to:
a. Define accounting according to ASC, AICPA and AAA;
b. Determine the overall objective of accounting;
c. Describe the practice of accountancy profession in the
Philippines and understand the Continuing Professional
Development in the field of accounting;

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 d. Know the meaning of generally accepted accounting
principles (GAAP);
e. Identify and describe Board of Accountancy, International
Accounting Standards Board and IFRS.

Activating Prior Learning

In order to understand our topic, we have to see first your prior
learning about accounting. Your task is to write everything that comes into
your mind when you hear the word ACCOUNTING. Write them in the circles
below.

ACCOUNTING

Presentation of Content

Definition
You have your own idea about accounting and what it means.
But for common and correct understanding of what accounting really
is, let us look at the definition given by 3 accounting bodies. I hope you’ll be able to
memorize these three definitions not only with your head but with your heart. If there is one
term you must know the definition by heart and can define even if asked during sleep is, the
word ACCOUNTING because in the first place you are accounting students. Magmumukha
ka pang matalino kapag tinanong ka ‘What is Accounting’, tapos isasagot mo, ‘Kaninong
definition ang gusto mo, according to ASC, AICPA, or AAA?’ Oh di ba? Bongga ka neng!
Hahahahahaha
(Note: If we’ll be able to see each other in class face to face, this is the
first thing I will ask you.  So make sure to memorize these three.)

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Accounting is defined as:
a. Accounting Standards Council (ASC)
Accounting is a service activity. Its function is to provide quantitative
information, primarily financial in nature, about economic entities,
that is intended to be useful in making economic decision.

b. American Institute of Certified Public Accountants (AICPA)

Accounting is the art of recording, classifying and summarizing in a
significant manner and in terms of money, transactions and events,
which are in part at least of a financial character and interpreting
the results thereof.

c. American Accounting Association (AAA)

Accounting is the process of identifying, measuring, and
communicating economic information to permit informed judgment
and decision by users of the information.

STOP. STOP. STOP.

Do not proceed with the next part of this learning material without you,
memorizing the three definitions of accounting above. Make sure to memorize
it first so that it will be easier for you understand the next topics that we will
discuss.  Go, fighting!

Are you done now? Are you sure, you already memorized the definition with
your mind and with your heart? Congratulations if you did! Well then, let us
proceed with our discussion.

In the given definitions, there are three (3) points that should be noted:
(1) Accounting is about quantitative information, meaning, that the
information needed are at least given is numerical;
(2) The information is likely to be financial in nature, which means, it
has something to do with finances or in simple term, money; and
(3) The information should be useful in decision-making.

So, in looking for information that will be considered as accounting

information, make sure that these 3 features are present.

The definition that has stood the test of time is the definition given by the
AAA or the American Accounting Association. (Before you proceed, can you recite
again the definition of accounting by AAA without looking at your notes?)

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This definition states that the very purpose of accounting is to provide
quantitative information to be useful in making economic decision.
The definition also states that accounting has a number of components,
namely:

a. Identifying as the analytical component;

b. Measuring as the technical component;
c. Communicating as the formal component.

Let us now discuss in detail these three components.

I. IDENTIFYING
 It is the recognition and nonrecognition of business activities
as “accountable” events, meaning it has effect on assets,
liabilities and equity. In other words, the subject matter of
accounting is economic activity or the measurement of
economic resources and economic obligations. Only economic
activities are emphasized and recognized in accounting.
Transactions – economic activities of an entity
- can be external (exchange transactions or those
involving one entity and another entity) or internal
(involving the entity only)

External Transactions Internal Transactions

Purchase of goods from a supplier Production of goods
Borrowing money from a bank Casualty loss
Sale of goods to a customer Sale of goods to branch office
Payment of salaries of employees
Payment of taxes to the government
Payment of debt to creditors

II. MEASURING
 It is the assigning of peso amounts to the accountable
economic transactions and events.
 If accounting information is to be useful, it must be expressed
in terms of a common financial denominator. As in our case,
the Philippine peso is the unit of measuring accountable
economic transactions
 Financial statements without monetary amounts would be
largely unintelligible or incomprehensible
Historical cost – original acquisition cost and the most common
measure of financial transactions

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 Current value – this includes fair value, value in use, fulfilment
value,
and current cost

III. COMMUNICATING
 It is the process of preparing and distributing accounting
reports to potential users of accounting information.
 The first two components are useless if it is not
communicated to users for decision making
 This is the reason why accounting is called the “language of
business”
 Implicit in this process are:
 Recording or journalizing is the process of
systematically maintaining a record of all economic
business transactions after they have been
identified and measured
 Classifying is the sorting or grouping of similar and
interrelated economic transactions into their
respective classes. This is accomplished by posting
to the ledger (a group of accounts which are
systematically categorized into asset accounts,
liability accounts, equity accounts, revenue
accounts and expense accounts)
 Summarizing is the preparation of financial
statements (by-product of accounting process)
which includes
o Statement of Financial Position
o Statement of Financial Performance or
Income Statement
o Statement of Comprehensive Income
o Statement of Changes in Equity
o Statement of Cash Flows

 Accounting is also an information system that measures business

activities, processes information into reports and communicates the
reports to decision makers
 A key product of this information system is a set of financial
statements – the documents that report financial information about
an entity to decision makers
 Financial reports tell us how well an entity is performing in terms of
profit and loss and where it stands in financial terms.

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  The overall objective of accounting is to provide quantitative
financial information about a business that is useful to statement
users particularly owners and creditors in making economic decisions
 The essence of accounting is decision-usefulness
 An accountant’s primary task is to supply financial information so
that the statement users could make informed judgment and better
decision.
Remember, accounting is not about MATH. It is more than
that. If you are thinking that accounting is Math, then, you are in
the wrong course. Better turn back now before it’s too late. Haha!
It is not also for intelligent people only because Accounting is for
those who brave and strong who do not give up. If you are that
person, then, keep it up. Accounting is not that easy, but if you are
persistent and determined, you’ll learn to love the course, and can
pass through all challenges along your way as Accounting
students. Let us learn together! Have fun!

This time, let us look closely and understand the accountancy

profession and how accountants apply their knowledge and skills
in accounting.

THE ACCOUNTANCY PROFESSION

 Republic Act No.9298, Philippine Accountancy Act of 2004, is the
law regulating the practice of accountancy in the Philippines
 Accountancy has developed as a profession attaining a status
equivalent to that of law and medicine
 To qualify to practice the accountancy profession, a person must:
 A graduate of Bachelor of Science in Accountancy; and
 Pass the CPA Board Examination given by BOA which is
scheduled twice a year (May and October)
 The Board of Accountancy (BOA), the body authorized by law to
promulgate rules and regulations affecting the practice of the
accountancy profession in the Philippines. It is responsible for
preparing and grading the Philippine CPA examination.
 Single practitioners and partnerships for the practice of public
accountancy shall be registered certified public accountants in the
Philippines. The Securities and Exchange Commission shall not
register any corporation organized for the practice of public
accountancy
 A minimum of three years of meaningful experience in any of the
areas of public practice including taxation is required before BOA will
issue a certificate of accreditation to CPAs in public practice

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  CPAs, firms and partnerships of CPAs, including partners and staff
members thereof, are required to register with the Board of
Accountancy and Professional Regulation Commission (PRC) for the
practice of public accountancy.
 The PRC will issue the Certificate of Registration to practice public
accountancy which shall be valid for 3 years and renewable every 3
years upon payment of required fees.

SCOPE OF THE ACCOUNTANCY PROFESSION

Certified Public Accountants generally practice their profession in
three main areas, namely:
1. Public Accounting
- this is composed of individual practitioners, small accounting
firms and large multinational organizations that render
independent and expert financial services to the public
- it usually offers three kinds of services:
 Auditing or external auditing, the primary service
offered by most public accountants, is the examination of
financial statements by independent CPA for the purpose
of expressing an opinion as to the fairness with which the
financial statements are prepared. It is the attest
function of independent CPAs (attest function means a
CPAs review of company’s financial statement and
expressing an opinion).
 Taxation service includes the preparation of annual
income tax returns and determination of tax
consequences of certain proposed business endeavors.
The CPA must be thoroughly familiar with tax laws and
regulations and updated with changes in taxation law and
court cases concerned with interpreting taxation laws.
 Management Advisory Services refer to services to
clients on matters of accounting, finance, business
policies, organization procedures, product costs,
distribution and many other phases of business conduct
and operations. It includes:
o Advice on installation of computer system
o Quality control
o Installation and modification of accounting
system
o Budgeting
o Forward planning and forecasting

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 o Design and modification of retirement plans
o Advice on mergers and consolidations

2. Private Accounting
- includes CPAs who are employed in business entities in various
capacity as accounting staff, chief accountant, internal auditor
and controller (highest accounting officer in an entity)
- includes maintaining the records, producing the financial
reports, preparing the budgets and controlling and allocating the
resources of the entity
3. Government Accounting
- it encompasses 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
- its focus is the custody and administration of public funds
- many CPAs are employed in many branches of the government
such as:
o Commission on Audit (COA)
o Bureau of Internal Revenue (BIR)
o Department of Budget and Management (DBM)
o Securities and Exchange Commission (SEC)
o Bangko Sentral ng Pilipinas (BSP)

CONTINUING PROFESSIONAL DEVELOPMENT (CPD)

 This refers to the inculcation and acquisition of advanced
knowledge, skill, proficiency, and ethical and moral values after
the initial registration of the CPA
 CPD raise and enhances the technical skill and competence of
the CPA
 Under the new BOA Resolution, all CPAs regardless of area or
sector of practice shall be required to comply with 15 CPD
credit units for renewal of CPA license and 120 CPD credit
units to practice the accountancy profession
 A CPA shall be permanently exempted from CPD requirements
in renewal of CPA license upon reaching the age of 65 years but
not for the purpose of accreditation to practice the accountancy
profession.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)

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  GAAP represents the rules, procedures, practice and standards
followed in the preparation and presentation of financial
statements
 It developed on the basis of experience, reason, custom, usage,
and practical necessity
 The overall purpose of accounting standards is to identify
proper accounting practice for the preparation and
presentation of financial statements
 Accounting standards create a common understanding
between preparers and users of financial statements
Application
These activities are assessment if you understand that discussions we
had. Though this will not be recorded, it will still form part of your class
standing so make sure to accomplish the tasks given to you. 

Your tasks:
a. Make a video of yourself defining ACCOUNTING according to the
three accounting bodies – ASC, AICPA, and AAA – and send your
video to my email account ( [email protected]) or to our
messenger group chat. Say your name at the beginning of the video
before reciting the definitions.
b. In your own words, describe and explain what you have
understand about accounting and its overall objective. Write your
answer in the box provided below.

Feedback
The items below will be checked and recorded as your seatwork and
quiz. Do well and enjoy!

Choose the best answer among the choices.

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1. What is the law regulating the practice of accountancy in the
Philippines?
a. RA No.9298 c. RA No. 9928
b. RA No. 9198 d. RA No. 9892
2. What is the body authorized by law to promulgate rules and
regulations affecting the practice of the accountancy profession in the
Philippines?
a. Board of Accountancy
b. Philippine Institute of Certified Public Accountants
c. Securities and Exchange Commission
d. Financial Reporting Standards Council
3. What are the three main areas in the practice of the accountancy
profession?
a. Public accounting, private accounting, and managerial accounting
b. Auditing, taxation and managerial accounting
c. Financial accounting, managerial accounting and corporate
accounting
d. Public accounting, private accounting and government accounting
4. Which statement is incorrect in relation to the practice of public
accountancy?
a. Single practitioners for the practice of public accountancy shall be
registered CPAs in the Philippines
b. Partners of partnerships formed for the practice of public
accountancy shall be registered CPAs in the Philippines
c. The Securities and Exchange Commission can register any
corporation organized for the practice of public accountancy
d. All of these statements are incorrect
5. CPAs are licensed by
a. The PICPA c. The city government
b. The SEC d. State government
6. All of the following describe accounting, except
a. A service activity
b. An information system
c. A universal language of business
d. An exact science rather than an art
7. The important points made in the definition of accounting include all
of the following except
a. Accounting information is quantitative
b. Accounting information is both quantitative and qualitative
c. Accounting information is financial in nature
d. Accounting information is useful in decision making
8. The accounting process is the recognition or nonrecognition of
business activities as accountable events

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 a. Identifying c. Communicating
b. Measuring d. Reporting
9. What are the events that affect the entity and in which other entities
participate
a. Internal events c. Current events
b. External events d. Obligating events
10. GAAP is an abbreviation for
a. Generally authorized accounting procedures
b. Generally applied accounting procedures
c. Generally accepted auditing practices
d. Generally accepted accounting principles
11. What is the primary service of CPAs in public practice
a. Auditing c. Taxation
b. Managerial Accounting d. Controllership
12. Accountants employed in entities in various capacities as
accounting staff, chief accountant or controller are said to be engaged
in
a. Public accounting c. Government accounting
b. Private accounting d. Financial Accounting
13. It is the area of the accountancy profession that encompasses
the process of analyzing, classifying, summarizing and communicating
all transactions involving receipt and disposition of government funds
and property and interpreting the results thereof.
a. Internal auditing c. Private accounting
b. External auditing d. Government accounting
14. How many CPD units are required for accreditation to practice
the accountancy profession?
a. 120 units b. 100 units c. 60 units d. 15 units
15. How many CPD units are required for renewal of CPA license?
a. 120 units b. 100 units c. 60 units d. 15 units

16. A CPA shall be permanently exempted from renewal of CPA

license
a. At the age of 65 years c. When practicing abroad
b. When working abroad d. When studying abroad
17. This refers to the inculcation and acquisition of advanced
knowledge, skill, proficiency, and ethical and moral values after the
initial registration of the CPA
a. Continuing Professional Development
b. Continuing Practical Development
c. Continuing Personal Development
d. Continuing Professional Discipline

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18. What is the measuring component in the definition of
accounting?
a. The recognition or nonrecognition of business activities as
accountable events
b. The assigning of peso amounts to the accountable events
c. The preparation and distribution of accounting reports to users of
accounting information
d. The preparation of audit report by CPAs

19. The communicating process of accounting includes all of the

following except
a. Recording
b. Classifying
c. Summarizing
d. Interpreting
20. What is the overall objective of accounting?
a. To provide the information that the managers of an economic entity
need to control the operations
b. To provide information that the creditors can use in deciding
whether to grant loans to an entity
c. To measure the periodic income of the economic entity
d. To provide quantitative financial information about an entity that is
useful in making economic decision

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Topic 2: THE INTERNATIONAL ACCOUNTING
STANDARDS
BOARD (IASB)

Learning Objectives:
At the end of the topic, the students will be able to:
a. Demonstrate the history and formation of IASB;
b. List and differentiate the structures of IASB;
c. Compare and contrast the IASB structures’ function;
d. Illustrate and discuss the IASB standard-setting process;
e. Explain the importance of having International Accounting
Standards;
f. Discuss the developments in Philippine Accounting
Standards.

Presentation of Content

This time, we will be discussing about one of the accounting standard-setting

bodies to which most of our Philippine Accounting Standards are based. Good
luck and enjoy!

INTERNATIONAL ACCOUNTING STANDARDS BOARD

 The International Accounting Standards Board or IASB now replaces

the International Accounting Standards Committee or IASC.
 The IASC is an independent private sector body, with the objective of
achieving uniformity in the accounting principles which are used by
business and other organizations for financial reporting around the
world

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  The IASB publishes standards in a series of pronouncements called
International Financial Reporting Standards (IFRS)
 However, the IASB has adopted the body of standards issued by the
IASC called International Accounting Standards (IAS)
 The IASB standard-setting process includes in the correct order
research, discussion paper, exposure draft and accounting standard.

HISTORY

International International IASC Foundation (known

Accounting Standards Accounting Standards as IFRS Foundation)
Committee (IASC) Board (IASB) was finalized the second
Foundation was established on April phase of the 2008-2010
Constitution Review in
formed on March 2001 2001
January 2010
THE INTERNATIONAL ACCOUNTING STANDARDS BOARD STRUCTURE

MONITORING BOARD
Approve and oversee trustees

IFRS FOUNDATION
22 Trustees appoint, oversee, raise funds

BOARD 16 (max. 3 part-time)

Set technical agenda, approve standards, exposure
drafts and interpretations

IFRS INTERPRETATIONS
IFRS ADVISORY COUNCIL
COMMITTEE
Approx. 40 members
14 members

WORKING GROUPS
For major agenda projects KEY:
Appoints
Reports to
Advises

Key terms and notes to remember:

 International Accounting Standards Committee (IASC)
Foundation was formed as a not-for-profit corporation
incorporated in the State of Delaware, USA. It is an independent
accounting standard setter based in London, UK
 International Accounting Standards Board (IASB) is an
independent private sector body. Its objective is to achieve

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 convergence in the accounting principles that are used by
businesses and other organizations for financial reporting
around the world
 Monitoring Board’s primary purpose is to serve as a
mechanism for formal interaction between capital market
authorities and the IFRS Foundation
 IFRS Advisory Council has 40 members and provides a forum
for organizations
 IFRS Interpretations Committee (formerly called the IFRIC) is
the interpretative body of the IASB. It comprises 14 voting
members appointed by the Trustees

IASB STANDARD-SETTING PROCESS

Staff are asked to identify and review the issues associated with a potential agenda
topic and to consider the application of the Framework to the issues

National accounting requirements and practices are studied and views about the
issues are exchanged with national standard-setters

Staff are asked to identify and review the issues associated with a potential agenda
topic and to consider the application of the Framework to the issues

The IFRS Foundation Trustees and the IFRS Advisory Council are consulted about
the topics and priorities in the IASB’s agenda

The IASB is required to carry out a public consultation on its agenda every three
years, the first of which was required to begin no later than June 30, 2011

An advisory group is formed (generally called a ‘working group’) to advise the IASB
and its staff on the project

A discussion document is published for public comment

An exposure draft approved by at least 9 votes of the IASB is published for public
comment

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A basis for conclusions is published within the exposure draft

 All comments received within the comment period on discussion documents and
exposure drafts are considered and discussed in open meetings

The desirability of holding a public hearing and of conducting field-tests is considered

A Standard is approved by at least 9 votes of the IASB and any dissenting opinions
are included in the published standard

 The Financial Reporting Standards Council (FRSC) now replaces

the Accounting Standards Council (ASC). It is the accounting
standard setting body created by the PRC upon recommendation of
BOA to assist the latter in carrying out its powers and functions
provided under RA No. 9298.
 The FRSC’s main function is to establish and improve accounting
standards that will be generally accepted in the Philippines. These
accounting standards constitute the “highest hierarchy” of generally
accepted accounting principles in the Philippines.
 The approved statements of the FRSC are known as Philippine
Accounting Standards (PAS) and Philippine Financial Reporting
Standards (PFRS)
 The Philippine Interpretations Committee (PIC) was formed by the
FRSC in August 2006 and has replaced the Interpretations Committee
formed by the ASC in May 2000 and its role is to prepare
interpretations of PFRS for approval by the FRSC and to provide
timely guidance on financial reporting issues not specifically
addressed in current PFRS
 The FRSC is composed of the following
 Chairman who had been or is presently a senior
accounting practitioner
 1 Representative each from:
 Board of Accountancy
 Securities and Exchange Commission
 Bangko Sentral ng Pilipinas
 Bureau of Internal Revenue
 Commission on Audit

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 
Major organization of preparers and users of
financial statements – Financial Executives
Institute of the Philippines (FINEX)
 2 Representatives each from accredited national
professional organization of CPAs:
 Public practice
 Commerce and industry
 Academe or Education
 Government
 The PFRS collectively include all of the following:
 PFRS which correspond to IFRS;
 PAS which correspond to IAS;
 Philippine Interpretations which correspond to
interpretations of IFRIC and Standing Interpretations
Committee and Interpretations developed by the PIC.
Application

Your task:

I. Arrange the following steps of IASB standard-setting process

according to its proper order. Write 1-12 to the spaces provided.
____ The IASB is required to carry out a public consultation on its agenda every three years,
the first of which was required to begin no later than June 30, 2011

___ A Standard is approved by at least 9 votes of the IASB and any dissenting opinions are
included in the published standard

___ All comments received within the comment period on discussion documents and
exposure drafts are considered and discussed in open meetings

____ An advisory group is formed (generally called a ‘working group’) to advise the IASB and
its staff on the project

___ Staff are asked to identify and review the issues associated with a potential agenda topic
and to consider the application of the Framework to the issues

___ The IFRS Foundation Trustees and the IFRS Advisory Council are consulted about the
topics and priorities in the IASB’s agenda

____ A basis for conclusions is published within the exposure draft

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___ National accounting requirements and practices are studied and views about the issues
are exchanged with national standard-setters
 _____ A discussion document is published for public comment

____ Staff are asked to identify and review the issues associated with a potential agenda
topic and to consider the application of the Framework to the issues

___ An exposure draft approved by at least 9 votes of the IASB is published for public
comment

____ The desirability of holding a public hearing and of conducting field-tests is considered

II. Draw the IASB Organizational Structure

Feedback

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I. Multiple Choice: Answer the following questions by encircling the
correct answer.
1. The International Accounting Standards Board was formed
a. To enforce IFRS in foreign countries
b. To develop a single set of high quality IFRS
c. To establish accounting standards for multinational entities
d. To develop accounting standards for countries that do not have
their own standard-setting bodies
2. The International Accounting Standards Board
a. Was the predecessor to the IASC
b. Can overrule the USA GAAP when their policies disagree
c. Promotes the use of high-quality and understandable global
accounting standards
d. Has its headquarters in Geneva
3. The IASB declared that the merits of proposed standards are assessed
a. From a position of neutrality
b. From a position of materiality
c. Based on possible impact on behavior
d. Based on arguments of lobbyist
4. The standard-setting process includes in the correct order
a. Exposure draft, research, discussion paper and accounting
standard
b. Research, exposure draft, discussion paper and accounting
standard
c. Research, discussion paper, exposure drafts and accounting
standard
d. Discussion paper, research, exposure draft and accounting
standard
5. The IASB employs a due process system which
a. Is an efficient system for collecting dues from members
b. Enables interested parties to express their views on issues under
consideration
c. Identifies the accounting issues that are the most important
d. Requires that all CPAs must receive a copy of IFRS
6. What is due process in standard-setting by IASB?
a. IASB operates in full view of the public
b. Public hearings are held on proposed standards
c. Interested parties can make their views known
d. All of these are part of due process in standard-setting.
7. The standards published by IASB are called
a. International Accounting Standards
b. Financial Reporting Standards
c. International Financial Reporting Standards

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 d. Statement of Financial Accounting Standards
8. What is a possible danger if politics plays too big a role in developing
IFRS?
a. Financial reporting standards are not truly generally accepted
b. Individuals may influence the standards
c. User groups become active
d. The IASB delegates its authority to elected officials
9. Accounting standard-setting
a. Can be described as a political process which reflects political
actions of various interested user groups as well as a product of
research and logic
b. Is based solely on research and empirical findings
c. Is a legalistic process
d. Is democratic in the sense that a majority of accountants must
agree with a standard before it becomes enforceable
10. IFRIC Interpretations issued by IASB
a. Are considered authoritative and must be followed
b. Cover newly identified financial reporting issues not specifically
addressed
c. Cover issues where unsatisfactory or conflicting interpretations
have developed
d. All of these are true about IFRIC interpretations

II. Identification. Identify the term described in each item. Write your
answer in the space provided before each item.

________1. These are standards published by IASB in a series of

pronouncements.
________2. It is the accounting standard setting body created by the
Professional Regulation Commission to assist the Board of Accountancy.
________3. It is an independent private sector body whose objective is to
achieve convergence in the accounting principles that are used by
businesses and other organizations for financial reporting around the world.
________4. This committee is the interpretative body of the IASB.
________5. These are the terms used for the approved statement of the
FRSC.
________6. These accounting standards constitute the ____________ of
generally accepted accounting principles in the Philippines.
________7. What do you call the predecessor accounting body of IASB?
________8. What do you call the predecessor accounting body of FRSC?
________9. The FRSC is composed of how many members?

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________10. A function in the IASB structure whose primary purpose is to
serve as mechanism for formal interaction between capital market
authorities and the IFRS Foundation.

Summary of the Unit

Accounting is defined by three accounting bodies – ASC, AICPA and

AAA. Among these, the definition of AAA states the very purpose of
accounting which is to provide quantitative information to be useful in
making an economic decision.
Accounting, according to American Accounting Association, is the
process of identifying, measuring and communicating economic
information to permit informed judgment and decision by users of the
information.
Identifying is the recognition or nonrecognition of accountable events.
Measuring is the assigning of peso amounts to the accountable
economic transactions and events
Communicating is the process of preparing and distributing
accounting reports to potential users of accounting information.
Republic Act No. 9298, known as Philippine Accountancy Act of 2004,
is the law regulating the practice of accountancy in the Philippines
and authorized Board of Accountancy to promulgate rules and
regulations.
CPAs practice their profession either in public accounting, private
accounting or government accounting.
GAAP or generally accepted accounting principles are accounting
rules, procedures, practice and standards followed in the preparation
and presentation of financial statements
The International Accounting Standards Board or IASB is the
standard-setting body for the world. In the Philippines, its counterpart
is the Financial Reporting Standards Council (FRSC).

Student’s Reflection on Learning

This part of the module will be a time for you to look back, and reflect on what
you have learned from this unit. Though, this will not be checked and
recorded, I would appreciate if you will do this wholeheartedly and with all
seriousness.

Answer the following questions and put your answers in the space provided.

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 1. Did you learn what you expected to learn? If yes, what made you
successful with this unit of instruction?

2. What did you learn that was unexpected and how did it change your
perspective about the course?

References:

 Valix, C. T., Peralta, J.F & Valix C. A. M. (2020). Conceptual

Framework and Accounting Standards. Manila, Philippines: GIC
Enterprises & Co.. Inc.
 Ballada, W., & Ballada S. (2020). Conceptual Framework and
Accounting Standards. Manila, Philippines: DomDane Publishers.

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