Reading and calculating : The study of accounting

It's been a year (2016) so far in the career of accounting and it's been tough. And it's all on me. It's due to the lack of skills and knowledge I've personally gathered during work and education as a student and a professional.

Therefore I thought of bringing out a summary of the study of accounting as a subject and a profession.

Accounting is a subject and a career where you basically read and calculate. That is the fundamental two activities involved.

Now this small summary of an article will expand on inception of accounting as a subject to it's practical learnings I made by myself as a professional and a student.

Now the first thing that came to my mind is accounting an art? or a science?

It's both actually. It is based on the following analysis.

Accounting is the science of recording and presenting the financial data of an economic entity by observing, detecting, investigating and identifying the economic events via established collecting, testing, analysing and presenting methods. Therefore it is evident that accounting is a science.

Definition of art is as follows.

Art is the study of the implementation of techniques and methods.

 Accounting is an art because it presents the financial findings by following and implementing a universally accepted method. (GAAP)

Therefore it can be concluded that accounting can be classified both as a science and an art.

History and the beginning of accounting was linked to a person called Luca Pacioli.

Luca pacioli, who was born in 1445 in Sansepolcro, Italy and died in 1517 in Sansepolcro, Italy was the founder of double entry system which is the foundation of accounting.

Now this article will not analyse the conceptual framework of accounting and subject areas like the following given below due to its immense coverage of accounting theory and practise which requires a lot time and space to elaborate its core meaning and usage. 

(01) The objective of financial statements 
(02) Underlying assumptions 
(03) Qualitative characteristics of financial statements 
(04) Elements of financial statements
(05) Measurement of the elements of financial statements and minimum compliance framework 

But the following aspects of simple accounting areas will be discussed in this article for understand accounting's role and it's perspective for businesses in functioning in the modern world.

Mainly there are five (05) types of financial statements.....

(01) A statement of financial position as at the end of the period
(02) A statement of comprehensive income for the period
(03) A statement of changes in equity
(04) A statement of cash flows
(05) Notes, comprising a summary of significant accounting policies

Accounting in Sri Lanka are regulated by Sri Lankan Accounting Standards (LKAS) and auditing is regulated by Sri Lankan Auditing standards (SLAus). These are based on International Accounting Standards (IAS).

Many of my accounting and auditing functions have been very average this year in performance.

Anyway I was able to learn many related concepts through practice and self-learning. A special note on reperformance activities should be made due to the inaccuracies I made during the audits.

Personal experience as an amatuer auditor was extremely tough. I was not very productive. This was due to lack of skills and knowledge in the respective field i've garnered throughout the year.

I was also exposed to analysing accounting financial statements for risk management through an ERP (Enterprise Resource Planning) system while doing my internship at a licensed commercial bank (Sampath Bank PLC). It was from June 2015 to December 2015.

I was also exposed to the study of annual reports before approving loans to them. Using basic financial statement ratios, the credit officers projects the companies feasibility as a debtor to continue with him as a client for the bank.

And to be honest I was an avid commerce student during my higher studies.

I studied commerce and accountancy as an optional subject to ordinary levels [O/L] (2007) and deeply studied commerce subjects for advanced levels [A/L] (2010).

I did not get selected to a local government university but did financial accounting, management accounting and business accounting for my business administration degree program (2013 - 2018) at NIBM and NSBM.(National Institute of Business Management / National School of Business Management)  And I also got qualified for AATSL (Association of Accounting Technicians of Sri Lanka - AATSL) in 2011 which is an entry level qualification for accounting and auditing.

I am currently a CIMA (Chartered Institute of Management Accountants) student who's studying in the operational level. I mostly do self study.

And also during the first year of my study as an accountant / auditor in summary work was extremely basic. But the struggle in the profession is understood.

And I also basically got myself managed to get the article signed for the first year (Executive level) for CA (Institute of Chartered Accountants of Sri Lanka) membership for future accounting experience at KPMG Sri Lanka.

So overall it was a tough but primary achievements were available during the year of 2016 in the study of accounting.

Dimantha myself, reading and calculating.

References

Images

·         Title: Calculator (2017). Format: (Jpg.). Available at : https://pixabay.com/en/calculator-solar-calculator-count-168360/ (Accessed date : 2/26/2017)

Websites

·         Website name: history.mcs.st-andrews (1999). Page title: Luka Pasioli. [Online] Available at : http://www-history.mcs.st-andrews.ac.uk/history/Biographies/Pacioli.html (Accessed date : 2/26/2017)

·         Website name: iEdunote.com (2017). Page title : How Accounting is both Science and Art ? [Online] Available at : https://iedunote.com/how-accounting-art-science (Accessed date : 2/26/2017)