Forma # 1.ai - ICAB

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everything eventually boil down to money? As businesses grow in size and complexity transcending national boundaries, it is necessary to understand the intricacies of balance sheets, profit and loss accounts and cash flows, and in general how financial statements are prepared and presented. The role of the auditor also becomes crucial in acting as an independent overseer of truth and fairness of such financial statements. His attestation is relied upon by investors and stakeholders in making investment decisions. Clearly good accounting systems and financial management require good accountants and their necessity in today’s business world is absolutely vital. What is Accounting Accounting is defined by the American Institute of Certified Public Accountants (AICPA) as "the art of recording, classifying, to employees, managers, owner-managers and auditors. Management accounting is concerned primarily with providing a basis for making management or operating decisions. Accounting that provides information to people outside the business entity is called financial accounting and provides information to present and potential shareholders, creditors such as banks or vendors, financial analysts, economists, and government agencies. Because these users have different needs, the presentation of financial accounts is very structured and subject to many more rules than management accounting. The body of rules that governs financial accounting is referred to as International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) and in the USA, as Generally Accepted Accounting Principles, or GAAP. Fra Lucas Pacioli (c 1445 – 1514), the Father of modern day Accounting devised the concept of Double Entry bookkeeping, still the cornerstone of modern day accounting. In this model, he proposed the idea of two sides of any financial transaction – a debit and a credit. Sophisticated and computerized accounting software and all the present day and futuristic models all rely on this very simple principle – for every entry, there must be an equal and opposite entry. Rather like Newton’s Third Law of Motion – for every action there must be an equal and opposite “The earliest records of Accounting date back more than 7,000 years to the Middle East and were found among the ruins of Babylon, Assyria and Sumeria, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof.” Today, accounting is called "the language of business" because it is the vehicle for reporting financial information about a business entity to many different groups of people. Accounting that concentrates on reporting to people inside the business entity is called management accounting and is used to provide information History The earliest records of Accounting date back more than 7,000 years to the Middle East and were found among the ruins of Babylon, Assyria and Sumeria, where people used primitive accounting methods to keep track of goats and herds. The Romans used accounting extensively and there are plenty of references in ancient Islamic and Hindu scriptures. Modern day accounting traces its roots to the 14th century when an Italian monk, Lucas Pacioli, reaction. See, we are a very scientific discipline. Double Entry system ultimately facilitated the development of joint stock companies, allowing investors to gain firsthand knowledge of their operations through the use of accounts prepared to provide this information. This development resulted in a split of accounting systems for internal (i.e. management accounting) and external (i.e. financial accounting) purposes, and subsequently also in accounting and disclosure 56 January - March 2011 The Bangladesh Accountant
egulations and a growing need for independent attestation of external accounts by auditors. Accounting as a Professional Qualification A professional qualification in accounting opens up many doors to finance, banking, management, audit and assurance, due diligence, tax and advisory services and is definitely a career worth thinking about. Accounting is mainly a post graduate professional qualification, although in recent times the doors have been opened up to A Level students also. There are several types of professional qualifications, the major ones being listed below: English system • Chartered Accountancy (CA) • Cost and Management Accountancy (CIMA) • ACCA American System • CPA Chartered Accountancy (CA) Chartered Accountancy is an English origin qualification and derives its name and roots from the Royal Charter granted by Queen Victoria of England in 1880 and is still regarded as the most prestigious accountancy qualification in the world. It is followed by the former Commonwealth countries, including Bangladesh and its South Asian neighbours, Australia, Canada, New Zealand, South Africa, Scotland and Ireland. The English Institute, full name – the Institute of Chartered Accountants in England & Wales, now has about 167,000 qualified accountants. The Chartered Accountancy qualification generally encompasses a 3 year apprenticeship period, referred to as Articles, with a licensed professional accounting firm. In addition to completing this Articleship period, the student also has to pass 2 or 3 sets of Professional exams in order to call himself a Chartered Accountant. Once they have qualified to become a Chartered Accountant, they can then apply for membership with the respective Institute of Chartered Accountants in their country and are then referred to as either an ACA (Associate Chartered Accountant) or an FCA (Fellow Chartered Accountant), the distinction being only in terms of seniority. ACAs have to complete 5 years of continuous membership and attain a certain number of CPD hours (Continuous Professional Development) after qualification to become an FCA. The local Institute of Chartered Accountants of Bangladesh has also recently signed an MOU with the English Institute (ICAEW) and changed its syllabus and examination procedures to bring us in line with the ICAEW qualification, thereby granting us access to international recognition for the first time. See <strong>ICAB</strong> website for further information: www.icab.org.bd The Bangladesh Accountant January - March 2011 57
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The Bangladesh Accountant January-M
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EDIT ORIAL The Perspective Plan and
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management and communication. There
Page 8 and 9: Uniform Accounting a must for Energ
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Page 12 and 13: A delegation of the Institute of Ch
Page 15 and 16: Bangladesh Capital Market Opportuni
Page 17 and 18: Budget for the sake of so called ec
Page 19 and 20: 8.Capital gain: The capital gain ma
Page 21 and 22: Avoiding Losses in the Share Market
Page 23 and 24: putting up anything-or very little.
Page 25 and 26: Table 11: Major Indicators related
Page 27 and 28: ) Huge inflow of new investors in t
Page 29 and 30: On one occasion, those who hold the
Page 31 and 32: It is widely accepted that the curr
Page 33 and 34: Figure 17: Overseas Migraon from Ba
Page 35 and 36: Source: BMET. Figure 18: Market Spe
Page 37 and 38: • Government should continue the
Page 39 and 40: These relative developments among t
Page 41 and 42: management which often readjusts th
Page 43 and 44: Fundamentals to Safeguard Investmen
Page 45 and 46: come in stock market to make profit
Page 47 and 48: Capital Market Review Volatility in
Page 49: current crisis in the capital marke
Page 52 and 53: “The stock market is but a mirror
Page 54 and 55: “The stock market is filled with
Page 56 and 57: “Oh, for the good old days when p
Page 60 and 61: Number of Qualified Accountants wor
Page 62 and 63: espect, the Ministry of Finance, In
Page 64 and 65: ody in the social development secto
Page 67 and 68: Opportunities and Challenges for Ad
Page 69 and 70: at cost less any accumulated amorti
Page 71 and 72: Students’ Section Sanjida Kasem F
Page 73 and 74: 13. Take breaks: Do not study at a
Page 75 and 76: Students’ Section Subject Duratio
Page 77 and 78: Students’ Section 10. The student
Page 79 and 80: Students’ Section 1/15/ICAB-2010
Page 81 and 82: Be better informed! - Subscribe to
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Forma # 1.ai - ICAB

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