Principles of Accounting Profession Ethics by AICPA, IAI, IFAC and Accounting system

Professional code of ethics as a general rule that binds each member, as well as a pattern of action that applies to each member of his profession. The main reason for the high level of professional action required by any profession is the need for public confidence in the quality of service provided by the profession, regardless of the individual providing the service.

Code of Ethics The Fundamentals of IFAC Professional Accountants :

1. Integrity

A professional accountant must be firm and honest in all his involvement in professional and business relationships.

2. Objectivity

A professional accountant should not allow biases, conflicts of interest, or excessive influence from others to rule out professional or business judgment.

3. Professional competence and sincerity

A professional accountant must act diligently and in accordance with applicable technical

and professional standards in providing professional services.

4. Confidentiality

A professional accountant must respect the confidentiality of information obtained as

a result of business relationships and business professionals shall not disclose such

information to third parties, without proper and specific authority unless there is legal

or professional right or obligation to disclose. 

5. Professional Behavior

A professional accountant must be obedient to relevant laws and regulations and should

avoid actions that may discredit the profession.

Code of Ethics The Fundamentals of AICPA Professional Accountants :

1. Responsible

In carrying out their responsibilities as professionals, members should apply sensitive

professional and moral judgments in all their activities.

2. Public interest

Members must accept their obligation to act in a manner that serves the public interest,
respect for public trust, and demonstrate a commitment to professionalism.

3. Integrity

To maintain and extend public trust, members must perform all professional responsibilities

with the highest integrity.

4. Objectivity and Independence

A member shall maintain objectivity and be free from conflicts of interest in carrying out

professional responsibility, and shall be independent in presenting facts and views when

providing audit services and other attestation services.

5. Due Care

A member must comply with the technical and ethical standards of the profession,

strive continuously to improve competence and service in carrying out the professional

responsibilities with the best members ability.

6. Nature and Service Coverage

A member in public practice shall observe the Principles of the Professional Code of Ethics

in determining the scope and nature of the services to be provided.

Ethical principles according to IAI in Congress VIII of 1998 which has been determined:

1. Profession Responsibility

In the principle of professional responsibility, each member is obliged to use moral and

professional considerations for each activity.

2. Public Interest

Each member is obliged to always act within the framework of public service, respect

for public trust, and demonstrate a commitment to professionalism.

3. Integrity

Integrity is a unity that underlies the emergence of professional recognition. Integrity is a

quality that underlies public trust and is a standard for members in testing all decisions it

makes.

4. Objectivity

The principle of objectivity requires members to be fair, impartial, honest, intellectual,

unbiased or biased, and free from conflict of interest or under the influence of others.

  Accounting System

The accounting system is an overview consisting of manual records or computerized financial transactions for the purpose of recording, categorizing, analyzing and reporting timely financial management information. The accounting system has various functions such as collecting and storing transaction data, processing data into information for decision making, and as an organizational control.Unsur-Unsur Sistem Akuntansi

Generally an accounting system has 5 (five) main elements :

1. Forms

A form is a document used to record / record a transaction event. In the form there are data transactions that can be used as a basis in the recording.

2. Journal 
Journal is an accounting system undertaken to record, group similar transactions, and summarize other financial data. The results of the data summaries are then posted to the respective accounts in the ledger. Commonly used Journals form are as follows: 

Journal of Cash Receipts, journals provided specifically for record transactions cash receipts.
 

Journal of Cash Expenditures, special journals are provided to record all types of cash expenditures.

Journal of Purchase, the journal used to record purchases on credit. Cash purchases fit into cash disbursement journals.

Sales Journal, a journal provided specifically for recording sales transactions on credit. Cash sales are included in the cash receipts journal.

The General Journal is provided specifically for recording bookkeeping adjustments, correction transactions and anything else that can not be recorded in special journals.

3. The General Ledger The ledger consists of a set of accounts that serve to summarize the financial data previously recorded in the journal. The ledger account is also considered as a place for the classification of financial data for the presentation of financial statements.

4. Subsidiary Book (Subsidiary Ledger) The auxiliary book contains auxiliary accounts in detailing financial data, such as grouping the types of transactions that occur in one company to another. 

5. Reports The report is the end result of the accounting process, in the form of balance sheet, income statement, capital change report, marketing cost report, production cost report, cost of goods sold report, debt list, inventory balance list.

Examples of Accounting Systems 
1. Management accounting
The purpose of management accounting is to provide accounting information to managers for the purposes of planning, controlling, and managing business operations. 
2. Inventory Accounting
Inventory accounting systems are used to plan and track inventory levels, as well as related inventory activities. One common inventory system is a bar code tracking, where each item is marked with a bar code item.
3. Non-Profit Accounting
 It is an accounting system for nonprofits that have specific characteristics of reporting requirements. For example, about a fund tracking system, so donations given for a particular purpose can be known to have been correctly channeled. The software should also be able to generate reports of total donations donated by individual donors.

In an accounting system, the existence of accounting software as a supporter of a reporting system is very important. Journals are online accounting software that provides important features of inventory tracking, asset management, and cost reporting, can be an appropriate option that provides many conveniences for a variety of business needs. Journals can be accessed anytime and anywhere in realtime, so you do not have to worry about losing valuable information that happens all the time in your business.

Accounting Ethics Code and Accounting Principles.

Code of ethics of accounting is a guideline of attitudes, behavior and deeds in carrying out tasks and in daily life in the accounting profession. Accounting ethics code can be a balancer of the negative aspects of the accounting profession, so the code of ethics as a compass that shows the moral direction for a profession and at the same time ensures the moral quality of the accounting profession in the eyes of society

Professional ethics consists of five dimensions, among others:

• Personality

• Professional skills

• Responsibility

• Implementation of code of ethics

• Interpretation and refinement of the code of ethics

10 Accounting Principles

1. Economic Entity Principle

The principle of economic entity is also called the unity principle of entity. This principle recognizes the unity concept of a company's business. That is, that a company is a business entity or an economy that stands alone and separated from the owner or other economic entities.

2. Period Principle

The principle of the accounting stage is also called the principle of time. The meaning of this principle is the term and financial reporting of business entities with a certain period. This principle serves to produce measurable financial information. The commonly used period is 1 year, ie from 1 January to 31 December.

3. Unit Monetary Principle

The working principle is the recording of transactions in the form of money without factors. Examples of non-formal factors such as performance, quality, performance, strategy, and so forth. These factors are not included in the unit of money because they can not be used in the money process.

4. Historical Cost Principle

The principle of historical cost requires the assessment or recording of financial transactions of a good or service on the basis of the costs incurred in obtaining the goods or services. If there is a bargaining process when a transaction occurs, then the assessed and recorded are mutually agreed-upon prices.

5. Going Concern Principle

The principle of business continuity assumes that a business entity will operate continuously and sustainably. Because there is no company who wants his business will stop in the middle of the road, except for certain events such as natural disasters.

6. Full Disclosure Principle

The principle of full disclosure is the accounting principle that provides complete and

informative financial information. Because remembering the number of users accounting

information.

7. Revenue Recognition Principle

Revenue is the addition of wealth that occurs as a result of business activities such as sales,

rentals, revenue-sharing, and so forth. The basis used to measure income is the amount

of cash or cash equivalents earned on such financial transactions.

8. Matching Principle

The Principle of Fellowship means that the costs incurred by the company are met or

matched with the income received. The point is to determine the net income value of

each period. This principle relies heavily on the principle of revenue recognition.

Because if the income recognition is postponed, the charging is not possible.

9. Consistency Principle

The principle of consistency is the accounting principle that should be used in financial

reporting consistently or unchanged in terms of the methods, procedures and policies used.

The purpose of the financial statements produced in a period can be compared with the

financial statements of previous periods, so that it can provide benefits for its users.

     10. Materiality Principle 

The principle of materiality is the principle that recognizes the measurement and

recording of the accounting material or value. Worth in terms of nominal value and

can be sold. If it is not material, it should not be assessed and acknowledged.