ACCOUNTING
We all use accounting information in our daily lives
for one or a variety of specific purposes. Where accounting information is
expected to be defined as an information system that can measure and
communicate financial information about economic activity. Accounting information is needed
by the company management in formulating various decisions in solving all
problems faced by the company. Accounting information generated from a
financial statement is useful in preparing various projections, for example projections
of future cash needs. For example, if we are considering buying a new vehicle
that can be sold, we use information to determine whether we will be able to
pay monthly installments.
But what is meant by
accounting itself? Accounting is an information system that measures business
activities, processes data into reports, and communicates the results to
decision makers. Accounting is the "business language" because with accounting most business information is communicated. The company distributes accounting reports that summarize the company's financial performance to owners, creditors, the government, and potential investors. Good accounting is very important for business and good investment decisions. Poor accounting is something that cannot be tolerated. Investors will sell their shares and drop their share prices in response to indications of a company's accounting disharmony. The better we master the language of business, the better we will manage the company.
In the world of accounting known as accounting theory.
Accounting theory is a branch of accounting consisting of systematic statements
about principles and methodologies that differentiate from practice. Vernon Kam
(1986) considers that accounting theory is a comprehensive system which includes
postulates and theories related to it. He divides elements of the theory into
several elements: basic postulates and assumptions, definitions, accounting
objectives, principles or standards, and procedures or methods
Vernon Kam (1986) argues that the function of the
existence of accounting theory is to become a guideline for accounting standard
drafting institutions to compile their standards, provide a reference frame for
solving accounting problems in the absence of official standards, determine limits
in terms of doing "judgment" in preparing financial statements,
improve the understanding and confidence of report readers of the information
presented in the financial statements improve the quality of comparability
Hendriksen considers accounting theory as a set of
general principles to be able to provide a general frame of reference from
which accounting practices are valued. The accounting theory formulated will
not be able to keep up with economic, social, technological and scientific
developments that are so fast.
The American Accounting
Association's Committee on Concepts and Standards for External Reports states
that there is no complete financial accounting theory that covers and fulfills
the desires of all circumstances and time effectively therefore. In the
existing financial accounting literature is not accounting theory but a
collection of theories that can be formulated to overcome differences in
requirements desired by users of financial statements
For the formulation of
accounting theory it cannot rely solely on accounting theory, it must use
accounting literature and other relevant disciplines. But accounting theory is
a very important instrument in compiling and verifying the accounting
principles used in preparing financial statements to be presented to its users.
As a conclusion, accounting
theory is a concept of the proposition that presents systematically the
description of accounting phenomena that explains the relationship between
variables and other variables in the accounting structure with the intention to
explain and predict phenomena that may arise. There is no complete accounting theory at any time. Therefore accounting theory must also cover all accounting literature which provides approaches that differ from one another.
Source:
J. Weygandt, Jerry. dkk. 2005. Accounting
Principles. USA: John Wiley & Sons, inc
Jusup, Al Haryono. 2011. Dasar-Dasar
Akuntansi. Yogyakarta: Bagian Penerbitan Sekolah Tinggi Ilmu Ekonomi YKPN
harahap, sofyan syafri. 2007. Teori Akuntansi edisi revisi. Jakarta:
Grafindo
