Finance & Acctg Mgmt

8/7/2019 Finance & Acctg Mgmt

1/20

Presented By:Presented By:

Mrs. Lorna C. QuebrarMrs. Lorna C. Quebrar

4/14/2011Accounting & Finance Management 1


2/20

Business (Corp)

Data

ountin

Re ulation

Rules/Re ulation

ountin

(Bookkeepin )

Reports

Outside Inside

Mana ement

ountin

Finan ial

ountin

(FS)

Investors

Loan Offi ers

Banks

BIR (Govt)

Others (SEC)

Mana ers

(Hired or own the

ompany)

Employees

4/14/2011ountin & Finan e Mana ement 2


3/20

These Managers design and monitor theThese Managers design and monitor theinformation control to ensureinformation control to ensure

confidentiality of information; so thatconfidentiality of information; so that

information will not leak which willinformation will not leak which will

give outsiders advantage.give outsiders advantage.



4/20

AccountantsAccountants

Outside:Outside:

ExternalExternalAuditorsAuditors

ConsultantsConsultants

Inside:Inside:

InternalInternalAuditorsAuditors

ControllersControllers

TreasurerTreasurer


External AuditorsExternal Auditors assures that reasonable representationassures that reasonable representation

of the status of the businessof the status of the businessConsultantsConsultants (usuallyAccountants also) who(usually Accountants also) who particitateparticitate inin

the information process.the information process.

Financial Statement - annual to outsiders

- monthly to insiders


5/20


Employees/AccountantsEmployees/Accountantsworking in the Finance Section:working in the Finance Section:

AnalyticalAnalyticalWithWith

PersonalPersonalIntegrityIntegrity

WithWithEthicsEthics

ProfessioProfessio--nallynally

CompeCompe--tenttent

ProtectProtectthethe

confidenconfiden--tialitytiality ofofinformainforma--

tiontion

CanCancommucommu--nicatenicate

informainforma--tiontion fully.fully.


6/20


FinancialFinancial

ResourcesResources

(Cash)(Cash)

Owners/Owners/

CreditorsCreditors

Assets andAssets and

OtherOther

InventoriesInventories

FINANCING OPERATING

BOTH INVOLVES COMPUTATIONBOTH INVOLVES COMPUTATION


7/20


2 Kinds ofAccounting

AccrualAccrual

Proper matching of cost againstProper matching of cost againstrevenues.revenues.

Cash BasisCash Basis

Recognize income increase whenRecognize income increase whencash is received and incomecash is received and incomedecreases when cash is paid.decreases when cash is paid.


8/20


Ex: Acquired asset on account to be paid

in Oct.

Accrual - Asset

Accounts Payable ToyotaCash Basis - No entry


9/20

4/ 4/Accounting & Finance Management 9

Basic Financial Statements

1. Income Statement

(Indicator of business growth)Indicator of business growth)

Users:

Managers/Employees Availability of resources

for additional compensation.Creditors/Stockholders Interests/dividends

Sales Expenses Income

2. Balance Sheet

(Provides information about assets, how they are(Provides information about assets, how they are

acquired and interest of the owner.)acquired and interest of the owner.)


10/20


Assets = Liabilities and Capital (income)

Basic Financial Statements

3. Income Statement

(Assess the credit worthiness of the business,Assess the credit worthiness of the business,

whether the company can pay debts as they comewhether the company can pay debts as they comedue. )due. )

Net increase/decrease during the year /mo.Net increase/decrease during the year /mo. XXXX

Cash at the beginning of the mo./yearCash at the beginning of the mo./year XXXX

Cash at the end of the mo./yearCash at the end of the mo./year XXXX


11/20


Procedures that transform the businessProcedures that transform the business

activities into a Financial Statementactivities into a Financial Statement

1. Gathering of documents (Purchase Order, Cash register tapes,

Invoices)2. Analysis (Accounts and Amounts)

Books : Disbursement Books (Payments)

Cash Receipts Book (Collections) Journal

Included here: General Ledger

Subsidiary Ledger (ControlAccount) AccountsReceivable/Payable

3. Journalizing/Posting4.Adjustments (Errors)

5. Preparation of FS

VERY IMPORTANT: ACCOUNTABILITYAND CONTROL SHOULD BE

OBSERVED.


12/20



13/20


1. Managers, Officers and Employees operate within

their assigned responsibilities and accountabilities.

2. Act for the good of the business.

Internal ControlInternal Control(Policies &(Policies &

Procedures)Procedures)

a. AccountingAccountingsystemsystem

b. Controlb. ControlProceduresProcedures

c.c.EnvironmentEnvironment


14/20


Documentation/ReportsPreparation


15/20


1. Authority and responsibility (One assigned should1. Authority and responsibility (One assigned should

be held responsible; motivates one to perform well.)be held responsible; motivates one to perform well.)

2. Separation of duties ( Accounting from Asset2. Separation of duties ( Accounting from AssetCustody / Authorized individual from Asset Custody.)Custody / Authorized individual from Asset Custody.)

Accounting separate from administration (CashierAccounting separate from administration (Cashierfrom Bookkeeping)from Bookkeeping)

To avoid fraud, theft, misstatements, padding, etc.To avoid fraud, theft, misstatements, padding, etc.


16/20


Early detectionEarly detection

Unintentional error will be discovered.Unintentional error will be discovered.

Accountability to the overage orAccountability to the overage or

shortage in relation to cash errorshortage in relation to cash error

or fraud.or fraud.

Expected Outcome:


17/20


3. Adequate documents/records3. Adequate documents/records

PrePre--numbered vouchers/ serializednumbered vouchers/ serialized Filed cancelled checks/vouchers/invoices.Filed cancelled checks/vouchers/invoices.

4. Safe keeping of assets and records.4. Safe keeping of assets and records.

aultsaults ocked storage rooms.ocked storage rooms.

If computerized, backIf computerized, back--up for programs, accessup for programs, accesscontrol (personal code)control (personal code)


18/20


55. Checks on recorded amounts. Checks on recorded amounts

Typographical errors, actual inspection vs. OnTypographical errors, actual inspection vs. Onrecordrecord


19/20


Includes Managers,Personnel/Employees,Policies & the attitude of

everyone.


20/20


Documents

Finance & Acctg Mgmt