Institute of Business Administration, Karachi
Financial Accounting & Information System
Spring 2023 – Session -1 | Main Campus | Saturday, 14th January, 2023
With: M. Hanif Idrees: mhidrees@iba.edu.pk
Institute of Business Administration, Karachi
Agenda
‫الر ِح ِيم‬
ِ ‫س ِم ه‬
ْ ‫ِب‬
َّ ‫الرحْ مـَ ِن‬
َّ ‫ّللا‬
1. Welcome and introduction with students and sharing of instructor’s
profile
2. Classroom rules
3. Spring 2023: Calendar
4. Counting to accounting
5. Accounting a tool of economics
6. Divisions of Accounting,
InformationSystem
Global
Accounting
Standards
and
7. Maintaining Balance: Entity Concept and Accounting Equation
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
Instructor’s profile
NAME
CONTACT
EMAIL
MUHAMMAD HANIF IDREES
Cell: +923008224473
mhidrees@iba.edu.pk
ACADEMICS
QUALIFICATION
INSTITUTE
Bachelor of Commerce University of Karachi thru Government National College:1988
Institute of Chartered Accountants of Pakistan (ICAP):1992
Fellow member
Institute of Cost & Management Accountants of Pakistan (ICMAP):1996
Certified Director
Accreditation under internationally acclaimed Institutional Shareholder
Services from Pakistan Institute of Corporate Governance (PICG): 2007
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
Instructor’s profile
PROFESSIONAL PROFILE
CURRENT
DESIGNATION
Director Finance
Independent Director & Chairman Audit Committee
Advisor
Visiting faculty
PAST
Group Chief Financial Officer
Chief Financial Officer
Senior Director Finance (CFO) & Company Secretary
Tax Manager for Pakistan – Global Role
Senior Manager Finance (CFO) & Company Secretary
General Manager Finance - Chemicals Division
Accounting / Reporting/ Finance Manager/Financial
Analyst
Manager Accounts and Finance
Audit Training
ORGANISATION
Dadex Eternit Limited
Buxly Paints Limited
NPO engaged in medical education and health
services, Logistics Companies and Chemical
manufacturing / Trading concern
IBA
Tufail Chemical Group
International Industries Limited
DHL Pakistan (Private) Limited
Deutsche Post DHL (DP DHL)
Sony Pakistan (Private) Limited
Jaffer Brothers (Private) Limited
ICI Pakistan Limited
Hoechst Pakistan Limited (now Sanof-Aventis)
A. F. Ferguson & Co.
Institute of Chartered Accountants of Pakistan (ICAP)
Visiting faculty
Institute of Cost & Management Accountants of
Pakistan (ICMAP)
KPMG
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
Classroom rules
1.Class representative(CR):
Name: M. Adeel Aslam Siddiqui;Cell:+923362715951;email:m.siddiqui.23845@khi.iba.edu.pk
1.Weightage:
Assignments (two best)
Quizzes (two best)
Mid-term
Final
20%
15%
25%
40%
Class Participation
• Every Saturday: 6:30 pm (after Maghreb) to 9:30 pm with short break for Isha prayers
• Attendance & Punctuality: Punctuality is encouraged and is appreciated to ensure class starts and
finishes on time. There will be no retake if you miss a quiz, an assignment or class.
• The PDF versions of the presentations done in class will be uploaded on LMS after the session.
Therefore, during the session focus on the topic being discussed rather than taking notes.
Conduct
You are requested to kindly raise your hand in the class and speak only when acknowledged. Your
class participation will help you develop your communication skills, your critical thinking skills and build
your self-confidence. Every class is a chance to polish your functional knowledge and leadership skills.
Therefore, please take responsibility of your own development .It is extremely important for the benefit
of everyone that instructions are followed with Team spirit.
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
SPRING 2023: CALENDAR
SPRING 2023: CALENDAR YEAR 2023
Spring Semester Begins
January 13, (Friday)
Classes end
April 15 (Saturday)
Semester ends
May 23, (Tuesday)
Midterm Exams
March 01(Wednesday) to March 07, (Tuesday)
Mid-Semester Break
March 08 (Wednesday) to March 14 (Tuesday)
Faculty Evaluation
April 17 (Monday) to May 04 (Tuesday),
Final Exams
May 12 (Friday) to May 23 (Tuesday),
Last Date for Submission of
Results
June 07 (Wednesday)
1st of Ramadan (expected)
March 23 (Tuesday)
Jummatul Wida & Eid ul Fitar
April 21 (Friday) & April 22 (Saturday)
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
Counting to “Accounting”
‫يم‬
ِ ‫س ِم ه‬
ْ ‫ِب‬
ِ ‫الر ِح‬
َّ ‫الرحْ مـ َ ِن‬
َّ ‫ّللا‬
‫سورة الجن‬
72
28
‫صى‬
ِ ‫س َاَل‬
َ ْ‫ت َر ِبه ِه ْم َوأ َ َحا َط ِب َما لَ َد ْي ِه ْم َوأَح‬
َ ‫ِليَ ْعلَ َم أَن قَ ْد أ َ ْبلَغُوا ِر‬
‫ع َددًا‬
َ ‫ش ْي ٍء‬
َ ‫ُك َّل‬
So that Allah may bring to light that surely they (the Messengers) have
communicated the messages of their Lord, and Allah has (already)
encompassed what they have (of Allah’s injunctions and the knowledge of
the unseen) and He has kept count of everything (i.e. He knows the exact
number of everything).
،‫تاکہ ہللا (اس بات کو) ظاہر فرما دے کہ بے شک ان (رسولوں) نے اپنے رب کے پیغامات پہنچا دئیے‬
‫علوم غیبیہ میں سے) جو کچھ ان کے پاس ہے ہللا نے (پہلے ہی سے) اُس کا‬
‫ت ا ِٰلہیہ اور‬
ِ ‫اور (اَحکاما‬
ِ
‫ اور اُس نے ہر چیز کی گنتی شمار کر رکھی ہے‬،‫اِحاطہ فرما رکھا ہے‬
Translation from: Irfan-ul-Quran by Dr. Muhammad Tahir-ul-Qadri
Both currency and accounting began through ‘concrete counting’, which means
counting being object-specific - five boats would be represented by a different
word or object than five apples.
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
Accounting a tool of economic
1. Economics is a branch of social sciences that is
concerned with the production, consumption, and transfer of
resources.
2. Accounting deals with measuring, recording, reporting
and analysis of financial and non-financial information about
economic entities such as businesses and corporations.
3. Measuring, recording and reporting falls within Financial
Accounting and analysis part falls within the domain of
Management Accounting.
4. Accounting is a tool of economics.
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
Divisions of Accounting & Standards
1. Accounting: A set of concepts and techniques that are used to measure, record
report and analyze financial and non-financial information about an economic unit.
Information is reported to external and internal users which include business managers,
owners, creditors, governmental units, financial analysts, employees, etc.
2. Accounting is broadly divided into following branches:
• Financial Accounting
• Managerial Accounting
3. Financial Accounting:
• Financial accounting is targeted toward external users.
• Standardization is needed to facilitate global business evaluations. International
Accounting Standards (IAS) and International Financial Reporting Standards (IFRS)
are global accounting standards.
• Unit of measurement is the functional currency i.e., the main currency in which an
economic entity conducts its business. Where an entity transacts in many currencies
but report their financial statements in functional currency, the foreign currencies have
to be translated into the functional currency.
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
Managerial accounting
❖
Managerial accounting is:
➢
Targeted toward specific needs of management.
➢
Used for business planning, controlling, decision making, etc.
➢
Does not need to follow any specific set of mandatory guidelines
❖
Following is the example to understand the difference between Financial accounting and
Managerial accounting.
PKR in million
Total
Regions
Products
EU
AP
22,000
2,000
20,000
A
30,000
15,000
15,000
B
Ma
nag
eria
l ac
nting
ccou
cial a
Finan
cou
ntin
g
PKR in million
100,000
REVENUE
C
D
Total
11,690
12,250
58,940
16,500
7,560
41,060
28,190
19,810
100,000
ACCOUNTING INFORMATION SYSTEM
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
Information systems
▪ A strong information system is needed to reliably capture and summarize
business transaction data
▪ Information technology has reshaped accounting
▪ However, any information technology system must adopt the underlying
principles / system of processing the accounting information.
▪ Thus, underlying accounting information system remains valid and
important.
▪ Information technology has integrated the business processes with
accounting information system to bring timeliness and efficiency in
producing the accounting output. Enterprise Resource Planning (ERP)
systems such as SAP, Oracle etc. have evolved.
▪ Now, accounting is more of a:
✓ dynamic discipline
✓ decision-making discipline
✓ rather than a bookkeeping task which has been mostly taken over
by information technology
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
Maintaining Balance: Entity Concept & Accounting Equation
‫يم‬
ِ ‫س ِم ه‬
ْ ِ‫ب‬
ِ ‫الر ِح‬
َّ ‫الرحْ مـ َ ِن‬
َّ ‫ّللا‬
َ‫ض َع ْال ِمیزَ ان‬
َّ ‫ َوال‬.7
َ ‫س َما َء َرفَعَ َھا َو َو‬
And He is the One Who has maintained the sky raised high and (He is the One) Who has set up the balance
(for justice),
(ar-Rahmān, 55:7)
‫ان‬
ِ َ‫ أ َ ََّّل ت َْطغ َْوا فِي ْال ِمیز‬.8
So that you violate not the balance whilst weighing.
(ar-Rahmān, 55:8)
َ‫ْط َو ََّل ت ُ ْخ ِس ُروا ْال ِمیزَ ان‬
ِ ‫وأَقِی ُموا ْال َو ْزنَ ِب ْال ِقس‬.
َ 9
And keep weighing justly and do not make the balance fall short.
(ar-Rahmān, 55:9)
Translation from: Irfan-ul-Quran by Dr. Muhammad Tahir-ul-Qadri
Entity concept: A business or an organization or an economic unit and its owners are two separately
identifiable parties. e.g. utility bill of a business run by an individual in a house of three rooms out of which
one room is used for business.
Assets = Liabilities
Assets: The economic resources of the entity
• Include cash, accounts receivable, inventories, land, buildings, equipment, and intangible assets (patents
and other legal rights and claims)
• Presumed to entail probable future economic benefits to the owner
Liabilities: Amounts owed to others relating to loans, extensions of credit, and other obligations.
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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Institute of Business Administration, Karachi
THANK YOU
FAIS – Session -1 | IBA Main Campus | Saturday 14th January, 2023: M. Hanif Idrees: mhidrees@iba.edu.pk
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