This website uses cookies to ensure you have the best experience. Learn more

Accounting Theory Issues Essay

5360 words - 22 pages

Company Background
Cahaya Ilmu Enterprise is a enterprise business which established since 2006 located at Bukit Kayu Hitam. But the business had moved to Changlun on December 2010. Mr. Abdul Razak bin Mahamud is the owner of Cahaya Ilmu Enterprise and he is also a teacher at Sekolah Kebangsaan Bukit Tangga. Cahaya Ilmu Enterprise main activity is selling Islamic products such as Al-quran, Tafsir, CD of Islamic talk and Islamic children, minyak ‘atar, buah tin dates, air syifa’ and etc. All of the products are Halal. Besides, there also provide Photostat service. Furthermore, the business opens a tuition centre and Al-quran class there. Mr. Abdul Razak starts his business by using his own ...view middle of the document...

Cahaya Ilmu Enterprise keep the sales receipts for the whole day and record in into the book at the end of the day. The sales are record according to the date and types of accounts. For example, if it is a sale of books transaction it will be recorded as sales in book’s file as well as in sales ledger. The same thing goes to inventory. Each and every inventory that arrived and had been taken out will be updated in the same book.
At the end of the day, the owner will come to the shop and review the accounts of the day. It is to make sure that the workers record transactions properly. After all the transactions had been recorded manually in the book, it will be transferred into computer system. The shop used Microsoft Excel to record their accounts. They create a template for each book, for instance, all transactions that they record in CD file they will create a template for that particular file in the Excel.
In addition, the cash are managed by the workers who are on duty but if the workers want to use the cash they have to inform the owner and record it in the books. At the end of the month there is a friends of the owner will come to the shop and audit all the accounts and files. This is to make sure that the workers record the transactions based on the right nature of the transactions.

After we have the interview session, the main problem from Cahaya Ilmu Enterprise is no proper authorization in recording, cash holding, and asset holding. Proper authorization or establish responsibilities should done to ensure that all activities adhere to establish guide lines , responsibility for a task is clearly establish and assigned to one person. When a problem occurs in a company where responsibility is not identified, determining who is at fault is difficult. We have ask them about whether they have any department or unit or worker that do the account, the company’s transaction was recorded by the workers at the end of the day. In another word, any worker can do the record for that day. Then the owner will go and check all the transaction and number of cash available is equal with the invoices or receipts and the cash available. The problem is, when there is a mistake, is hard to find out who is responsibility on the particular transaction.
All the workers do not have accounting qualification, no any experience in the accounting work, and no any knowledge about the basic of accounting, They are only assists by a friend of the owner who is an accounting teacher. They cannot maintain adequate records with their limited experience. The owner refuse to outsource the service from SMP because he want to save cost and he think that is not necessary to use this kind of service. Reliable records are a source of information that managers use to monitor company activities. Adequate documents and records provide evidence that financial statements are accurate. Controls designed to ensure adequate recordkeeping include the creation of invoices...

Other Essays Like Accounting Theory Issues

Management Accounting Developments Essay

3336 words - 14 pages theory behind management accounting developments............................. 2 Application to practice- management accounting developments analysis and research of companies financial statements (Japanese point of view)....................................... 3 Conclusions

Accounting Standard Board Paper

1323 words - 6 pages due to the US companies have large amounts of revenue and profits in the foreign markets. The International Accounting Standards Board (IASB) was established in 1973 to achieve the purpose of harmonizing the international accounting standards (Schroeder, Clark, & Cathey, 2011). The companies that are in need of capital or investments are looking at cost and time issues, because these companies have to redo their financial statements according

Accounting Standards Board Paper

1219 words - 5 pages prepare students for the CPA exam. The degree is a requirement in order to sit this exam as well as working experience in the public sector. It will also help student's master theory and principles of a wide range of problems and possible issues that arise as an accounting professional. ("University Of Phoenix", 2015) The MSA or in my case the Graduate Certificate in Accounting can not only prepare you for taking several exams like the CPA, CMA, CIA

Zeff 1978

5865 words - 24 pages restructuring of troubled "•Charles T. Horngren. "The Marketing of Accounting Standards," JofA, Oct.73, pp.63-64. '8 Leonard M. Savoie, "Accounting Attitudes," in Robert R. Sterling (editor). Institutional Issues in Public Accounting (Lawrence, Kan.: Scholars Book Co., 1974), p.326. " S e e the testimony and submissions in APB Public Hearing on AccourUin;; and Reporting Practices in the Petroleum Indu.stry, Cases in Public Accounting Practice [no

Education: Fasb 12345

639 words - 3 pages FASB and the International Accounting Standard Board are working closely together to develop a Conceptual Framework. The goal is developstandards that are objectives-based, internally consistent, and internationally converged. The Conceptual Framework is structured theory of accounting and states the scope and objective of financial reporting, identifies and defines the characteristics of financial information such as relevance and reliability

Basic Ideas of Agency Theory

980 words - 4 pages reports that show the position and results of the activities controlled by them. Users of accounting information- These are individuals that have an interest in the organization preparing the accounting reports. They include; management, shareholders, labour, government and consumers. The Auditor- The auditor examines the accounting reports as prepared by the agents and issues an audit report to the users following this examination. The regulators

Forensic Accounting

4859 words - 20 pages determination and establishment of fact in support of legal case. That is, to use forensic techniques to detect and investigate a crime is to expose all its attending features and identify the culprits. In the view of Howard and Sheetz (2006), forensic accounting is the process of interpreting, summarizing and presenting complex financial issues clearly, succinctly and factually often in a court of law as an expert. It is concerned with the use of accounting

Human Resource Accounting

4817 words - 20 pages of the company under study. The hypothesis of the study can be specified as under: H0 : There will be a positive association between company size and level of HR disclosure. PT: Profitability is measured by the margin. Corporate profitability may affect the Human Resource Accounting Disclosure. It might be easier for a profitable company to take necessary measures to concentrate on the issues of human resource and to disclose the same. Hence it

'Accounting Standard's

4411 words - 18 pages additional to the full-time members, there are approximately 68 staff members. These staff are, "professionals drawn from public accounting, industry, academe, and government, plus support personnel. In 1984, the FASB formed the Emerging Issues Task Force (EITF). This group was formed in order to provide timely responses to financial issues as they emerged. This group includes 15 people from both the private and public sectors coupled with

Accounting Theory

3331 words - 14 pages considerations are merely theorized in theory, its practical notions have yet to be ascertained, which proclaim its limitation on the matter. 6. Conclusion In conclusion, it can be observed, through the various empirical methods posited above, the manners in which conservative financial reporting can be applied practically in the field of accounting. Though these applications themselves possess certain limitations, it is imperative to note that no such


697 words - 3 pages Board and the head of the PCAOB’s professional standard-setting division on matters of policy and technical issues relating to the auditing of public companies as well as what the auditor’s role was. His role of advisor helped keep the PCAOB from being influenced by the accounting industry and their standards. 2. What does Carmichael see as the underlying mission of the PCAOB? Carmichael sees the underlying mission of the PCOAB is to

Related Papers

Accounting Standards Board Essay

1370 words - 6 pages addressing Segment Reporting, Discontinues Operations, and Valuation of Intangible Assets are examples of the equivalent or similar standards between the IASB and FASB (IASB Equivalents, 2011). MSA Program The Masters of Science in Accountancy program (MSA) helps and prepares students for a professional career in the Accounting field. The program helps students master the theory and principles that frames a wide range of problems and issues

Accounting Theory Essay

1315 words - 6 pages Contemporary issues in Accounting Unit Code: ACCOO106 Assignment -1 Subject: Normative accounting theory To: Mr Khalid Mahmood Name: Muhammad Mehedi Alam ID: 21562675 Word count: 1145(reference excluded) Date of Submission-07/12/09 Normative accounting theories CPPA- current/constant purchasing power accounting CCA- current cost accounting CoCoA- continuous contemporary accounting Current purchasing power accounting a

Accounting Standards Boards Paper

1367 words - 6 pages through the classes it offers and by the development of a course curriculum centered on current accounting principles and prevalent issues. Our global economy is changing and merging together as one. Companies are no longer limited to operating only within their country boundaries and are crossing international borders. As this global change continues to evolve, the various organizations responsible for setting accounting standards need to come

Current Development In Accounting Thoughts Essay

2580 words - 11 pages & Perera, 1996, p.51). Accounting theory could be described as a group of practical constructs that implementconjectures on accounting issues into accounting procedures (Sterling, cited in Mathews & Perera, 1996). This definition usefully relates accounting theory and practice. In order to provide a pertinent explanation and expectation of phenomena theories need to be evaluated. The evaluation is crucial if one aims to determine whether a