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FINANCIAL REPORTING ENVIRONMENT - Coggle Diagram
FINANCIAL REPORTING ENVIRONMENT
OVERVIEW OF FINANCIAL REPORTING ENVIRONMENT
STATUTORY REQUIREMENTS
COMAPANIES ACT 1965
SECURITIES INDUSTRY ACT 1983
BANKING AND FINANCIAL INSTITUTION ACT 1989
FINANCIAL REPORTING ACT 1997
ANTI MONEY LAUNDERING ACT 2001
ACCOUNTING DEVELOPMENT IN MALAYSIA
Prior to 1957 – Companies Ordinance
1958 – Malaysian Association of Certifies Public
Accountants (MACPA) was formed
Companies ordinance were then repealed.
1967 – The Malaysian Institute of Accountants
(MIA) was established under the Accountant Act 1968 – MACPA issued first accounting guidance
1987 – Operation of MIA were activated. MIA began issuing accounting standards.
1985 – Companies Act 1965 was amended. New Ninth Schedule with more comprehensive disclosure requirements that includes the preparation of statement of source and application of funds
1968 – MACPA issued first accounting guidance
which dealt with specimen company accounts.
1978 – MACPA was admitted as a member of International Accounting Standards Committee
1984 – MACPA issued the first Malaysian Accounting Standard
Characteristics of ideal theory
The ability to evaluating and explaining the current events correctly.
Must be wide acceptance
The ability analysing past events and forecast future events
the potentiality of solving the problems created by the happening of an event.
having the quality of authenticity and also authoritative.
verifiable through testing of hypothesis.
should have descriptive approach in general and a normative approach in particular.
An overview of the development and regulation of accounting practice
Development of disclosure regulations
Twenty first century political pressure on financial accounting regulation
Early codification of accounting rules
Early development of professional accounting bodies
Reliance on double entry accounting
Development of accounting concepts and principles
Institution contribution phase.
Professional contribution phase.
Management contribution phase.
Overt politicization phase.
Who is Luca Pacioli?
Pacioli is often associated with the introduction of double-entry bookkeeping.
What did Luca Pacioli write?
The terms Debit (adebeo) and Credit (credito) were used.
He explained that three books are used in the ‘Italian method’: a memorandum, a journal and a ledger.
He said, ‘All entries … have to be double entries, that is, if you make one creditor, you must make someone debtor’.
He advised the computation of periodic profits and the closing of the books. ‘It is always good to close the books each year, especially if you are in a partnership with others. Frequent accounting makes for long friendship’.