History of financial,

management accounting
By Chen Wei Gee (B1200006)
Ng En Ling (B1402955)
Teh Jo Yee(B1401086)
Wong Jo Ann (B1500087)
In term of accountability, what
new practices involved in later
20 centuries?
th

Timeline from late 20th centuries

Timeline of accounting history from
late 20th centuries
Accounting standard
setting bodies are
In Malaysia, Accounting
national or international
standards are issued by
organisations that have
the Malaysian
been delegated
accounting standards
Accounting standard? responsibility for
board (MASB) by virtue
setting generally
of the power conferred
accepted accounting
by the Financial
principles
Reporting Act, 1997.
(GAAP) by statute in a
country.

1500-1900 1920 1940

trade and business grow history of accounting standards
(Boxwell, 2017)
History Of Accounting Standard
The American Institute of Accountants set up the
1930 Committee on Accounting Procedures (CAP)
First standard setting body

Generally Accepted Accounting Principles (GAAP) was

1953 produced by the Committee on Accounting Procedures
a standard framework of guidelines for financial
accounting

The Committee on Accounting Procedures (GAAP) was

1959
replaced by the Accounting Principles Board (APB).
(Boxwell, 2017)
standard
History of accounting
1973 APB replaced by the Financial Accounting
Standards Board (FASB)

FASB was taken over by the Accounting

Standards Board (ASB)
1990 today it is the ASB who have the task of setting
and monitoring accounting standards.

(Boxwell, 2017)
 first computerised accounting system
1953 was implemented by Arthur
Anderson Consultancy

The first computerised

spreadsheet appeared 1961
the first 'off the shelf'
1968 accounting auditing system
appeared
The first ever micro-
computers started
appearing 1970 (Boxwell, 2017)
 stand alone accounting
packages

The Intel 8080 processor the

1978 MOS 6502 processor became

available
Apple II micro-computer &
Cloud accounting
Visicalc was developed

IBM PC (Microsoft Windows)

1980 Visicalc (Lotus 1-2-3 &

Microsoft Excel)
where employees, bookkeepers and
accountants can all access the software online
at the same time.
ACT and SAGE started to be
used This development allows people to work from
home and sharing information with the
relevant people.
PCs were used for
1999 accounting by most
businesses in the UK.

(Boxwell, 2017)
 TIMELINE FROM LATE 20TH
CENTURIES(MALAYSIA)
The Malaysian Institute of
1958 Certified Public Accountants
(MICPA) was established

the Association became The Malaysian

1964 Association of Certified Public Accountants
(MACPA)
Malaysian Institute of 1967
Accountants (MIA) was
established under the Accountants
Act, 1967
MICPA issued Recommendations
on the Presentation of Accounts
1972 and "Audit Reports and
Qualifications
Recognising the need for
consistency

1940 1970 1970-1980 ("MICPA", 2017)

 TIMELINE FROM LATE 20TH
CENTURIES(MALAYSIA)
The MICPA's involvement
1975 in standard setting was
intensified when we
became a member of the
IASB
IIA Malaysia was established
as a Chapter of The Institute
1977 of Internal Auditors Inc, USA
and elevated to the status of a
National Institute in 1988
1970-1980
MIA adopted all the technical
1987 pronouncements that had been issued
by MICPA up to that date.
a Common Working
Technical Committee was
formed by MICPA and MIA
to review and set accounting
1989 and auditing standards for
Malaysia. However, this
Committee was dissolved in
December 1992
1980-1900 ("MICPA", 2017)
("Malaysian Institute of Accountants", 2017)
 TIMELINE FROM LATE 20TH
CENTURIES(MALAYSIA)

Malaysia accounting standards

board (MASB) established
under financial reporting act
1997 1997
to enhance the quality and
accounts of the company are prepared in
enhancement of accounting
standards 1998 accordance with approved accounting standards
issued by MASB

1990 2000 2000 present

("Malaysian Institute of Accountants", 2017)
 TIMELINE FROM LATE 20TH
CENTURIES(MALAYSIA)
Malaysian Association of Certified
2002 Public Accountants (MACPA)
renamed to The Malaysian
Institute of Certified Public
Accountants (MICPA)
2009
("Malaysian Institute of Accountants", 2017)
The MASB issued Malaysian Private
Entities Reporting Standard (MPERS)
sets a new milestone for financial 2014
reporting of private entities in
Malaysia.
MICPA signed a Memorandum of Understanding
(MoU) with the Institute of Chartered Accountants
Australia (ICAA),
sealing a new era of professional ties promoting the
interest of students, members and the accounting
profession.
 TIMELINE FROM LATE 20TH
CENTURIES(MALAYSIA)-NOW
there are 1,407 firms which are
offering auditing services
another 836 firms providing other
accountancy related services
global networks of accounting firms
such as Deloitte and KPMG have
presence in Malaysia
Accounting
firms in
Malaysia
accountancy bodies such as
Association of Chartered Certified
Accountants (ACCA),
Chartered Institute of Management
Accountants (CIMA),
Institute of chartered accountants in
England and Wales (ICAEW),
Institute of chartered accountants In
Australia (ICAA)
CPA Australia are also active in
developing Malaysians towards attaining
professional accountancy qualifications.
Accounting
bodies in
Malaysia
In term of accountability, what
new practices involved in later
20 centuries?
th

Accountant and accountability

journals
WHAT DOES THE TERM ACCOUNTABILITY
REALLY MEANT?
Accountability is the responsibility of either an individual or department to
perform a specific function in accounting.

Examples:-

An auditor reviewing a Accountability forces an

company's financial
statement is responsible and
legally liable for any
misstatements or instances
of fraud.
accountant to be careful and
knowledgeable in their
professional practices, as
even negligence can cause
them to be legally
responsible.

(Azim & Ara, 2015)

Accountability can be defined by the responsibility to execute a desired role.

Dykstra (1939) says, In ethics and governance, accountability is

answerability, blameworthiness, liability, and the expectation of account-
giving.

Accountability may mean responsibility or capable of being held

responsible for something; capable of being explained; being held to
account, scrutinized, and being required to give an account or
explanation

(Azim & Ara, 2015)

In high accountability
cultures,
Productivity
Customer Satisfaction
Teamwork
Engagement

Expenses
Waste of Time and
Resources
Not my job

(Tanner, 2016)
 Basics of Accountability:
Code Of Ethics For Professional Accountants

Integrity Objectivity A professional

A professional
accountant should not
accountant should be
allow bias, conflict of
straightforward and
interest or undue
honest in all professional
influence of others to
and business
override professional or
relationships.
business judgments

(IFAC, 2010)
 Basics of Accountability:
Code Of Ethics For Professional Accountants

Professional
Competence
Acting diligently to maintain
and Due professional knowledge and
care
skill at the level required to
ensure that a client or
employer receives competent
professional service. A
professional accountant
should comply with relevant
laws and regulations and to
avoid any action that
discredits the profession.
Respect the
Confidentiality confidentiality of
information acquired as a
result of professional and
business relationships and
should not disclose any
such information to third
parties without specific
authority.

(IFAC, 2010)
Factors Affecting The Accountability
Of Accounting

Professional Expertise Responsibility of the

of the Stakeholder Stakeholder

Accountability
of Accounting

Sincerity of the Ethical Behavior of the

Stakeholder Stakeholder

(Azim & Ara, 2015)

Accounting information will be useful only if accounting produce reliable, relevant and
consistent information which depends on maintaining the accountability of accounting.

Accountability of accounting depends on the accountability of the accounting

stakeholders. If there is situation where someone has been refused to be accountable,
then accountability fails to bud in the society.

An environment is needed to practice accountability by the stakeholders of accounting

which will ultimately ensure the accountability of accounting and it is possible only
when there is an existence of ethical society.

All the stakeholder should perform their best to uphold the accountability and they
should consider it as an accountability corporate social responsibility.

(Azim & Ara, 2015)

Did these practices increase or
decrease the discretion of
accountants?

Opinion about the practices

 In early days of accounting(1495)

Only focus on double entries, trading and evolutions

Until the last century, accountants focused almost exclusively on financial

information generated from double-entry bookkeeping.

Generally, it produces financial statements like journals, trial balance, profit

and loss statements, bank reconciliation statements and balance sheet etc.

Concern? Accountability?
 Present era of Accounting
Subfields are typically defined by the audience an accountant reports to:
outside investors (financial accounting), employees (managerial accounting),
tax authorities (tax accounting), citizens (governmental accounting), or
regulatory agencies (regulatory accounting).

one of the most significant roles to determine the success of any

organization.
 The central ethical issues in accounting arise because many parties involved in
the reporting process can distort measures to their own benefit, at the expense
of the reporting audience.
How does the very act of measuring performance distort performance?

Earning report: firms manipulate the earnings numbers reported to outside

investors
What are the pros and cons of granting managers judgment and
discretion in reporting?
In The PAST
different views of the role of
financial reporting made it
difficult to encourage
convergence of accounting
standards.
NOW
however, there appears to be a
growing international consensus
that financial reporting should
provide high quality financial
information that is comparable,
consistent and transparent, in
order to serve the needs of
investors. Over the last few years,
we have witnessed an increasing
convergence of accounting
practices around the world
Introduction of GAAP
Generally Accepted Accounting Principles(GAAP)
standard guideline and rules to maintain the daily records of a business.
Established in 1953

Importance:
GAAP helps businesses maintaining consistency in their appearance of
financial information.
GAAP prepared statements are not only for a specific time duration, it is
also kept on a daily basis.
It can increase the stakeholder trust.
 Establishment of MASB in Malaysia

the accounting standards Minimum statutory

standard setting has
issued by the MIA and the requirements for the
become too important to
MICPA are only binding preparers of financial
be left with the accounting
upon the members of the reports to adhere to the
profession alone.
profession. standards.
MASB
Develop conceptual framework and issue or revise existing standard

Under Financial Reporting Act 1997, the MASB has authority to set financial
reporting standards and issue statements of principles for financial reporting in
Malaysia.

The standards issued or adopted by the MASB are legally binding upon any
published financial statements. An amendment to the Companies Act in 1998 has
also made it a statutory requirement that the accounts of a company must be
prepared in accordance with the approved accounting standards issued by the
MASB, and the directors are responsible for ensuring such compliance.
 MASB(Malaysian
Accounting Standard
Board)
Degree of openness and thoroughness so that the approved accounting standards
issued reflect the inputs from all affected parties, and are in line with the
harmonisation effort at the international level.

signifies the efforts to have a well-guided standard setting process, and better
preparation of financial reports.

to ensure that companies provide quality and reliable financial statements, thereby
promoting greater accountability and transparency.
Did these practices increase or
decrease the discretion of
accountants?
Methods apply on the awareness
on responsibility and accountability
Awareness that can be applied on
responsibility and accountability
the fact or state of having a job to deal with and
Responsibility accountable or blame for something (Oxford dictionary,
2017).

the responsibility of either an individual or department to

perform a specific function in accounting (Oxford
dictionary, 2017).
Accountability An auditor reviewing a companys financial statement is
responsible and legally liable for any misstatements or
instances of fraud.

a perception or knowledge of a situation fact (Oxford

dictionary, 2017).
Awareness Accountability forces and accountant to be careful and
knowledgeable in their professional practices, as even
negligence can cause them to be legally responsible.
Self Awareness
Defined as conscious knowledge of a persons own character, motives,
desires and feelings.
One of the key of self awareness is to make conscious decisions
Self awareness is important for accountant and auditor in order to make
great decisions
It allows them to make the right decisions for example when accounting
fraud is detected, they should report it

(Mypersonalimprovement.com, 2017)
(Warwick Business School, 2016)
Ethics Awareness
Defined as the ability and willingness to determine ethical and moral
contexts and dilemmas
It is one of the important awareness for accountant and auditor
They are responsible to act ethically
When applied on decision making, it produces good business practices
Business ethics are important for accountant/auditor as it gain public
trust, accountable to stakeholders, proper usage of resources to
avoiding accounting fraud.

(UC San Diego, 2015)

Important practices to produce
reliable reports by accountant

Having effective system of

internal controls

Having an independent party

Having someone who represent

a diverse set of interests
supervise the whole reporting
process
References
Azim, M., & Ara, J. (2015). Accountability of Accounting Stakeholders. Global Journal of Management And Business
Research. [Accessed 31Aug. 2017].

Boxwell, A. (2017). Accounting History - A brief history of accounting. [online] Businessaccountingbasics.co.uk. Available at:
https://www.businessaccountingbasics.co.uk/accounting-history.html [Accessed 3 Sep. 2017].

International Federation of Accountants, & International Ethics Standards Board for Accountants. (2010). Code of
Ethics for Professional Accountants. International Federation of Accountants. [ONLINE] Available at:
https://www.ifac.org/system/files/publications/files/ifac-code-of-ethics-for.pdf [Accessed 31 Aug. 2017].

Malaysian Institute of Accountants. (2017). About MIA. [online] Available at:

http://www.mia.org.my/v1/AboutMIA/about_mia_menu.aspx [Accessed 3 Sep. 2017].

MICPA. (2017). MEMBERS' HANDBOOK-History of Accounting & Auditing Standards. [online] Available at:
http://www.micpa.com.my/micpanew/member/handbook-history.asp [Accessed 3 Sep. 2017].

Tanner, W. (2016). How to Create a Culture of Accountability in the Workplace. [online] SoapBox. Available at:
https://soapboxhq.com/create-culture-accountability-workplace/ [Accessed 3 Sep. 2017].
References
Sood, S. (2006). Setting the financial accounting standards in malaysia: the malaysian accounting standards board
(masb) and the accounting profession. [online] Lincoln University Digital Thesis. Available at:
https://researcharchive.lincoln.ac.nz/bitstream/handle/10182/2260/sood_mcm.pdf;jsessionid=A16
AC3C93F6F325006D521FD3E02D802?sequence=5 [Accessed 3 Sep. 2017].
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Available at: http://www.ethicalsystems.org/content/accounting [Accessed 3 Sep. 2017].
References
Warwick Business School. (2016). How can self-awareness benefit your career?. [online] Available at:
http://www.wbs.ac.uk/news/how-can-self-awareness-benefit-your-career/ [Accessed 3 Sep. 2017].
Mypersonalimprovement.com. (2017). Types of Responsibility and Developing Self Awareness. [online]
Available at: http://www.mypersonalimprovement.com/typesofresponsibility.shtml [Accessed 3 Sep.
2017].
UC San Diego. (2015). Ethics Awareness: Overview. [online] Available at:
https://blink.ucsd.edu/finance/accountability/ethics/overview.html [Accessed 3 Sep. 2017].