The Fact in Accounting Career

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In open economic era, business enterprises are growing in size and complexity faces high competition. The demand of accountants is increasing day by day to provide accounting information for making accurate and effective decision within short period. Now-a-day accounting is used in business enterprise as well as in socioeconomic development.

International Accounting Standards (IAS)

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International Accounting Standards has developed a set of standards for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial item.  From 1973 to 2000, international accounting standards (IAS) were issued by the Board of the International Accounting Standards Committee (IASC). IAS has developed 39 principles for stating how particular types of transactions and other events should be reflected in financial statements. In 2001, IASC was replaced by International Accounting Standards Board (IASB) and is now responsible to issue the international financial reporting standards (IFRS).


IAS 1    Presentation of Financial Statements

IAS 2    Inventories

IAS 7    Cash Flow Statements

IAS 8    Accounting Policies, Changes in Accounting Estimates and Errors

IAS 10    Events After the Balance Sheet Date

IAS 11    Construction Contracts

IAS 12    Income Taxes

IAS 16    Property, Plant and Equipment

IAS 17    Leases

IAS 18    Revenue

IAS 19    Employee Benefits

IAS 20    Accounting for Government Grants and Disclosure of Government Assistance

IAS 21    The Effects of Changes in Foreign Exchange Rates

IAS 23    Borrowing Costs

IAS 24    Related Party Disclosures

IAS 26    Accounting and Reporting by Retirement Benefit Plans

IAS 27    Consolidated and Separate Financial Statements

IAS 28    Investments in Associates

IAS 29    Financial Reporting in Hyperinflationary Economies

IAS 31    Interests in Joint Ventures

IAS 32    Financial Instruments: Presentation

IAS 33    Earnings per Share

IAS 34    Interim Financial Reporting

IAS 36    Impairment of Assets

IAS 37    Provisions, Contingent Liabilities and Contingent Assets

IAS 38    Intangible Assets

IAS 39    Financial Instruments: Recognition and Measurement

IAS 40    Investment Property

IAS 41    Agriculture

International Federation of Accountants (IFAC)

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IFAC stand for International Federation of Accountants which is a global organization for the accountancy professional. The International Federation of Accountants was founded on October 7, 1977 in Munich, Germany at the 11th World Congress of Accountants. The organziation’s headquarters have been based in New York City since its founding. Sixty-three professional accountancy bodies from 51 countries were signatories of IFAC’s first Constitution Beginning with 63 members in 1977; IFAC’s membership has grown over the past 30 years to now include 157 members and associates in 123 countries and jurisdictions, worldwide. IFAC members and associates, which are primarily national professional accountancy bodies, represent 2.5 million accountants employed in public practice, industry and commerce, government, and academia. Through its independent standard-setting boards, IFAC develops international standards on ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to support professional accountants in business, small and medium practices, and developing nations. In addition, IFAC issues policy positions on topics of public interest and comment letters on matters relevant to the profession.

South Asian Federation of Accountants (SAFA)

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South Asian Federation of Accountants (SAFA) was formed in the year 1984 to serve the accountancy profession in the South Asian Region and uphold its eminence in the world of accountancy. SAFA is an Apex Body of the South Asian Association of Regional Co-operation (SAARC) and a Regional Grouping of International Federation of Accountants (IFAC). SAFA represents over 170000 accountants having membership of the national chartered accountancy and cost and management accountancy institutions in the South Asian countries namely Bangladesh, India, Nepal, Pakistan and Sri Lanka. SAFA came into existence at the initiative of the accounting professional bodies in the South Asian Region, which has a bong of culture and homogeneity of professional environment.

The Chartered Institute of Management Accountants (CIMA)

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The Chartered Institute of Management Accountants (CIMA) is a United Kingdom based professional body offering training and qualification in management accountancy and related subjects, focused on accounting for business; together with ongoing support for members.
CIMA is one of a number of professional associations for accountants in the UK and Republic of Ireland. Its particular emphasis is on developing the management accounting profession within the UK and worldwide. CIMA is the largest management accounting body in the world. CIMA was founded in 1919 as “The Institute of Cost and Works Accountants” (ICWA). It specialized in the development of accounting techniques for use in the internal control of manufacturing, service and public sector operations. It developed a position as the leading professional body in the areas of product costing, budgeting, management accounting, investment appraisal and business decision making.
In October 1944 the Institute of Cost and Works Accountants organisation in Ireland was formed. The institute changed its name from ICWA to the Institute of Cost and Management Accountants (ICMA) in 1972 and subsequently to the Chartered Institute of Management Accountants (CIMA) in 1986, after the granting of a Royal Charter. A global Accounting qualification based in the UK, which is particularly active in Commonwealth countries. Its membership has grown from 15,000 in 1970 to 79,757 members and 92,909 students in 2009. It has played a role in founding fraternal professional bodies such as the Institute of Cost and Management Accountants of Pakistan, The Institute of Cost and Management Accountants of Bangladesh Institute of Cost and Works Accountants of India and the Institute of Management Accountants (USA).

The Institute of Cost and Works Accountants of India (ICWAI)

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The Institute of Cost and Works Accountants of India (ICWAI) is a statutory Professional body established on May 28,1959 under the Cost and Works Accountants Act, 1959 (Act No.23rd of 1959) enacted by the Parliament of India to regulate the profession of Cost and Management Accountancy in India over the years, the ICWAI has emerged as a leading professional institute in India and the second largest management accounting body in the world with focus on knowledge, training and research in the field of Management Accounting and Financial and Cost Management. The ICWAI syllabus, research, publications, training, MDP are renowned for exhaustive breadth and depth of knowledge. The ICWAI is recognized by the Government of India as a-Scientific and Industrial Research Organization (SIRO).

The ICWAI is committed
•    To develop the Cost and Management Accountancy profession.
•    To develop the body of members and properly equip them for functions.
•    To ensure sound professional ethics.
•    To keep abreast the latest developments in Management Accountancy, Cost and Financial Management.

The ICWAI is a Founder Member of International Federation Of Accountants(IFAC), Confederation of Asian and Pacific Accountants(CAPA), South Asian Federation of accountants (SAFA).    

The Graduate/Associate/Fellow members of the ICWAI are the professional Cost and Management Accountants of India. The headquarters of ICWAI is situated in Kolkata, and operates through four regional, councils (Kolkata, Chennai, Delhi and Mumbai), 94 chapters in India and 6 chapters abroad.

The Confederation of Asian and Pacific Accountants (CAPA)

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The Confederation of Asian and Pacific Accountants (CAPA) represent national accountancy organization in the Asia-Pacific region. Today, CAPA has a membership of 34 accountancy organizations in 24 jurisdictions. CAPA is by far the largest regional accountancy organization and its geographical area spans half the globe!
The idea of CAPA was conceived at the First East Conference of Accountants that was held from November 28 to December 1, 1957 in Manila, Philippines. However, it was only in 1976 that the Confederation of Asian and Pacific Accountants was formerly established.
CAPA’s mission is to provide leadership in the development, enhancement and coordination of the accounting profession in the Asia-Pacific region. To enable the profession to provide services of consistently high quality in the public interest. To achieve this mission, CAPA has a commitment to assist the accounting profession in emerging countries in the Asia-Pacific region.
CAPA region which spans from Canada in the east to Pakistan in the west have diverse economies of varying levels of maturity. The diverse resources and skills of these members are a unique strength of CAPA, which is used to benefit all its members. CAPA also has an important role to establish better communication and understanding amongst members in order to encourage greater cross border activities in the accounting and business arena.
CAPA also aims to enhance the accountancy standards and development of the profession by promoting harmonisation through the adoption of IF AC and IASC standards.

Certified Public Accountant (CPA)

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Certified Public Accountant (CPA) is the statutory title of     qualified accountants in the United States who have passed the Uniform  Certified Public Accountant Examination and have not met additional state education and experience requirement for certification-as a CPA . Individuals who have passed the Exam but have not either accomplished the required on-the-fob experience, or have previously met it but-in the meantime have lapsed their continuing professional education are, in many states permitted the designation “CPA Inactive” or an equivalent phrase. In most US states only CPAs who are licensed are able to provide to the public attestation (including auditing) opinions on financial statements. The exceptions to this rule are Arizona, Kansas, North Carolina and Ohio where, although the "CPA" designation is restricted, the practice of auditing is not.
Many states have a lower tier of accountant qualification (below that of CPA), usually entitled "Public Accountant" (with designatory letters "PA"). However the majority of states have closed the designation "Public Accountant" to new entrants, with only about 10 states continuing to offer the designation. Many PAs belong to the National Society of (Public) Accountants.
Many states prohibit the use of the designations "Certified Public Accountant" or "Public Accountant" (or the abbreviations "CPA-`-or "PA") by a person who is not certified as a CPA or, PA in that state. As a result, in many circumstances, an out-of-state CPA is restricted from using the CPA designation or designatory letters until a license or certificate from that state is obtained.
Texas additionally prohibits the use of the designations "accountant" and "auditor" by a person not certified as a Texas CPA, unless that person is a CPA .in another state, a non-resident of Texas, and otherwise meets the requirements for practice in Texas by out-of-state CPA firms and practitioners. Many other countries also use the title CPA to designate local public accountants. The equivalent in formerly British countries is the chartered accountant.

Certified General Accountant (CGA)

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Certified General Accountant (CGA) is the designation of professionals who are jointly members of the Certified_ General Accountants    Association of Canada (CCA-Canada) and a provincial or territorial CGA association or a CGA association overseas. Provincial, territorial  and offshore CGA affiliate   associations  work collaboratively  with CGA-Canada as part of a federation. The national association, first known as the Canadian Accountants' Association, was founded in 1908 by a trio of Canadian Pacific Railway accountants in Montreal, Quebec. Five years later, in 1913, the General Accountants' Association, as it was then known, was granted a charter from the government of Canada. By the mid-1940s, association chapters were established from coast-to-coast. Provincial, territorial and regional (offshore) chapters were later established under their own Charters.

The Association of Chartered Certified Accountants (ACCA)

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The Association of Chartered Certified Accountants (ACCA) is a British –accountancy body which offers the Chartered Certified Accountant (Designator letters ACCA or FCCA) qualification worldwide. It is one of the world's largest and fast growing accountancy bodies with 140000 members and 404000 affiliates and students in 170 countries (as at April 2010). The Institutes headquarters are in London with the principal administrative office being based in Glasgow. In addition the ACCA has a network of nearly 80 staffed offices and other centres around the world. The ACCA is a founding member body of the Consultative Committee of Accountancy Bodies (CCAB) and the International Federation of Accountants (IFAC)

The term 'Chartered' in ACCA qualification refers to the Royal Charter granted in 1974 by Her Majesty the Queen in the United Kingdom. ACCA can trace its history back to 1904 when eight people formed the London Association of Accountants. This was done in order to allow more open access to the profession than was available through the existing accounting bodies. at the time, notably the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland: As of 2006, the goal of ACCA is to become the world's leading global professional body by size.

Since Chartered Certified Accountant is a legally protected term, individuals who describe themselves as Chartered Certified Accountants must be members of ACCA and, if they carry out public practice engagements, must comply with additional regulations such as holding a practicing certificate, being insured against any possible liability claims and submitting to inspections.

The Institute of Cost and Management Accountants of Bangladesh (ICMAB)

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The Institute of Cost and Management Accountants of Bangladesh (ICMAB) is a leading professional body in Bangladesh that offers  professional qualification in Cost and Management Accountancy, with a focus on accounting for business. ICMAB programme has been designed to meet the evolving needs of business today and tomorrow. The Institute is a statutory constituted by the government -under the cost and management Accountants Ordinance 1977 (Ordinance No. LIII of 1977) and regulated under the cost and Management Accountants Regulations, 1980 (as amended upto date. It is managed as an  autonomous professional body under the  Ministry of Commerce. Apart from education, it is also engaged in regulating and promoting the profession of cost and management accounting in Bangladesh. The Institute of Cost and Management Accountants of Bangladesh is the only national institute of the country imparting training and education in the field of cost and management accounting. It has branches. in Chittagong, Rajshahi, Comilla and Khulna along with its main branch in Dhaka. The Institute. is managed by a National Council of 16 members. It is a member of the International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants (CAPA), and South Asian Federation of Accountants (SAFA). ICMAB members are known as CMAs with their designatory title ACMA and FCMA. They play leading roles in the accountancy and finance profession in Bangladesh. 30% of members live and work in UK, USA, Canada, Australia and Gulf Countries.

The Institute of Chartered Accountants of Bangladesh (ICAB)

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The Institute of Chartered Accountants of Bangladesh (ICAB) is the National Professional Accounting Body of Bangladesh established under the Bangladesh Chartered Accountants Order 1973 (Presidential Order No. 2 of 1973). The Ministry of Commerce, Government of the People's Republic of Bangladesh is the administrative Ministry of ICAB. The mission of ICAB is to provide leadership in the development, enhancement and coordination of the Accountancy Profession in Bangladesh in order to enable the profession to provide services of consistently high quality in the public interest. It is a member of The International Federation of Accountants (IFAC), The International Accounting Standards Board (IASB), The Confederation of Asian and Pacific Accountants (CAPA) and The South Asian Federation of Accountants (SAFA). ICMAB members are known as CAs with their designatory title ACA and FCA. They perform management consultant and professional services involving auditing or verification of financial transactions, books, accounts or records, or preparation, verification or certification of financial, accounting and related statements.

Difference between Put Option and Call Option

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Options
          An options give the holder (firm) the right (not the obligation) to buy or sell an asset in the future at an agreed upon price today.

Difference between Forward Contract and Futures Contract

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Forward Contract
      These are agreements where 1 party agrees to buy a commodity at a specific price on a specific future date  and the other party agrees to sell the product.
          Goods are actually delivered under forward contracts.
          Forward contract is a tailor made futures contract that is not traded on a organized exchange.
         Unless both parties are morally and financially strong, there is a danger that 1 party will default on the contract, especially if the price of the commodity changes markedly  after the agreement is reached.

Financial Ratio Analysis Formula

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Financial statement analysis can provide clues to underlying conditions that may not apparent from individual financial statement components.
Significant business decisions are frequently made using one or more of the analytical tool. Here illustrate a number of analytical tools that help business decision maker obtaining business objective.

Cost Accounting Planning & Control by Adolph, Usry

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Book Name: Cost Accounting Planning & Control

 


Authors:
- Adolph Matz phd
Professor Emeritus of Accounting
The Wharton School
University of Pennsylvania
-Milton F. Usry phd, CPA
Regents Professor of Accounting
College of Business Administration
Oklahoma State University

Accounting Principles by Weygandt, Kieso & Kimmel

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Book Name: Accounting Principles

Authors:

-Jerry J. Weygandt Phd. CPA
Arthur Andersen Alumni Professor of Accounting
University of Wisconsin

-Donald E. Kieso Phd. CPA
KPMG Emeritus Professor of Accounting
Northern Illinois University
Dekalb, Illinois

-Paul D. Kimmel Phd. CPA
Associate Professor of Accounting
University of Wisconsin Milwaukee
Milwaukee, Wisconsin

Publisher: John Wiley & Sons Inc.

Managing Accounting by H. Garrison, W. Noreen & C. Brewer

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Book Name: Managing Accounting

Authors:
-Ray H. Garrison D.B.A CPA
Brigham Young University

-Eric W. Noreen, Ph.D, CMA
Professor Emeritus
University of Washington

-Peter C. Brewer, Ph.D., CPA
Miami University-Oxford, Ohio

Limitations of Backflush Costing

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This system does not strictly adhere to Generally AcceptedAccounting Principles (GAAP). For example, work in process exists, but is not recognized in the financial statements.

Costs & Benefits of Backflush Costing

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‘Backflush Costing’ by organization manufacturing in cells, reducing defects and manufacturing lead time, and ensuring timely delivered of materials, enables purchasing, production and sales to occur in quick succession with minimum inventories.

Difference between Backflush Costing and Conventional Costing

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Two major differences between the two systems are:

Under conventional costing raw materials go to raw materials inventory, they are transferred to WIP. Under JIT/Backflush costing raw materials just go to RIP. In JIT raw materials are only ordered when required.
Under conventional costing, direct labor and overhead are charged direct to WIP. They are then moved to finished goods and cost of goods sold (sequential processing). 

Different Types of Costs

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Cost
A sacrifice or giving up of resources for a particular purpose, frequently measured by the monetary units that must be paid for goods and services.
 
Expense
The expired portion of cost is called expense. In other words, decrease in ownership claims arising from delivery of goods and services or using up of assets.
 
Direct Cost
Costs that can be identified specifically and exclusively with a given cost objective in a economically feasible way.
 
Indirect Cost
Costs that can’t be identified specifically and exclusively with a given cost objective in a economically feasible way.
 
Product Cost
Costs that are necessary and integral part of producing the finished product. These costs don’t become expenses under the matching principles until the finished goods inventory is sold.
 
Period Cost
Costs are not related to the manufacture of a product, the costs that are identified with a specific time period rather than a saleable product.
 
Manufacturing Cost
Costs that are related to production of an item. They are composite of direct material, direct labour and manufacturing overhead costs.
 
Commercial Cost
All the costs incurred outside the factory e.g. selling & marketing expenses and also administrative expenses.
 
Assignable Cost
The costs which are easily allocable to the respective department is called assignable cost.
 
Common Cost
The cost of operating a facility, operation, activity area or like cost objective that is shared by two or more users.
 
Process Costing
A costing system in which the cost of a product or service is obtained by using broad averages to assign costs to masses of identical or similar units. The method of allocating costs to products by averaging costs over large number of nearly identical products.
 
Operation Costing
A hybrid costing system applied to batches of similar product.
 
Fixed Cost
Costs that remain unchanged in total for a given period.
 
Variable Cost
Costs that change in total proportion to changes in the related level of activity volume.
 
Mixed Cost
A cost that has both fixed and variable elements.
 
Inventoriable Costs
All costs of a product that are regarded as an asset when they are incurred and then become cost of goods sold when the product is sold.
 
Target Costing
An approach that determines what a product or service should cost based on its sales price less a target profit. Target costing uses market research to estimate what consumer will pay for a specific product.
 
Management Cost
All the costs which are related to current operation which must continue to be paid to ensure the continued operating existence of the company.
Example- management and staff salary.
 
Traceable Cost
Any cost that may be traced to other department if some economic activity is changed or deleted.
 
Non-traceable Cost
 
Joint Cost
Cost of a single process that yield multiple products simultaneously.
 
Separable Cost
Cost incurred beyond spilt off point that are assignable to individual products.
 
Financial Cost
Costs that are related to obtaining funds for the operation of the company.
 
Avoidable Cost
Any cost that can be eliminated if some economic activity is changed or deleted.
 
Unavoidable Cost
Cost that can be continued even if some operation is halted.
 
Conversion Costs
Is written off at month or year end.

Career Opportunity for Accounting Profession

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Accounting has always been considered as the language and basic tool of business. Over the last two decades, the field of accounting has been changing dramatically in response to computer revolution, increased government regulations, frequent tax law changes, the globalization of business, and the on-going downsizing and restructuring of corporations. In this increasingly complex and competitive business environment, accounting skills are very much in demand and accounting has become a dynamic career. Accountants are now performing as prestigious role of financial experts, system professionals, management consultants, budget analysts, etc.

Generally Accepted Accounting Principles (GAAP)

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GAAP are the foundation, and ground rules of accounting practice. GAAP are followed by accountants all over the world.

Definition of GAAP: The accounting profession has developed a common set of standards that are generally accepted and universally practiced. This common set of standards is called generally accepted accounting principles (GAAP).

Luca Pacioli

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Luca Pacioli was born in Sansepulcro, in Tuscany. He was probably born during 1445.  He born in a poor family. He lived as a child with the Befolci family. This town is very much in the centre of Italy about 60 km north of the city of Perugia. As far as Pacioli was concerned, perhaps the most important feature of this small commercial town was the fact that Piero delta Francesca had a studio and workshop in there and delta Francesca spent quite some time there despite frequent commissions in other towns.

History of Accounting

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The history of accounting is very ancient like thousands of years. But the history of accounting profession is very young. It is indeed that modern civilization is impossible without accounting. . It is indeed that modern civilization is impossible without accounting.
Origin:
The origins of accounting are generally attributed to the work of Luca Pacioli, and Italian Renaissance mathematician. The concept of accounting comes from his book. But it is considered the first book on -counting was Della Mercatura e del Mercante Perfetto written by Benedetto Cotrugli in 1458 and published in 1573.

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