Accounting can be described as methodical recording, reporting, and examination of financial transactions of a business or an organization (Duska, 2011). Accounting mechanisms provide investors with appropriate and detailed information aimed at aiding their decision before and after investing in a particular organization. Globalization has resulted in the fraternization of...
The differences and similarities between United States’ Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) have dominated discussions. Most of these discussions focus on the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) with the need to globalize the application of accounting rules. To...
Risk-based there are Requirements of UK versions of ISA 700/705/706 in the auditing of Home Retail Group plc financial statements (The Auditing Practices Board, 2011). The final report on financial statements should have a clear explanation of opinion and must be based on evaluation and conclusion should be drawn from...
There are several factors which show that the company will be in business in the next financial year. The factors show the main successes recorded by the company in the previous years and might contribute to the continued operation of the company (Wright & Noe, 1996). The number of active...
According to Home Retail Group plc (2011), the half-year results reflected a six percent drop in sales compared to the previous year. Fall in sales is not a serious problem but when there is a continuous trend, the company’s management should be concerned (Wright & Noe, 1996). According to Home...
The audit approach which will be used in Auditing Home Retail Group plc is risk-based. Some of the risks in this particular case will be accepted after quantifying its risk level. The audit risk will be derived from three main assessments. Inherent risks would be derived from characteristics of Home...
Introduction At the beginning of the 21st century, accounting requires changes and improvements in its standards and principles. The cost of applying standards for financial reporting has long been a concern of the corporate preparers of financial information, a concern that traditionally has been expressed in demands that those who...
When it comes to journal entries in the accounting sphere, there are four adjustments. They have accrued income, accrued expense, deferred income, and deferred expense. Firstly, accrued income denotes that individuals and businesses “make a sale and collect payment at a later date” (Keythman, 2019, para. 2). Secondly, the accrued...
CAMP It is important to note the fact that each theory has its advantages and disadvantages. The main strength of the capital asset pricing model (CAPM) is the mathematical apparatus formulated by the given theoretical framework, which makes it possible to automate and simplify the process of forming an investment...
In most cases, companies’ financial statements are subject to mandatory audits, but an inspection cannot guarantee that the reporting data is not falsified. As a rule, investors, potential partners, and external users of reporting primarily pay attention to the three leading indicators of the company’s performance in the reports: revenue,...
‘Sarbanes-Oxley act’ (SOx) was endorsed in 2002 in the US, to address the limitations that came about with internal control rules (Moeller 57). It was sponsored by a personality, Sarbanes a senator and Oxley a representative. It initiates compliance to the existing accounting procedures and promotes transparency in fiscal reporting...
Introduction The comparative horizontal analysis will be used to analyze the Accounts of General Electric’s Company. This technique requires at least two consecutive periods of information. The objective is to find and identify changes that have taken place over an accounting period (Plewa & Friedlob, 1995). The difference in dollar...
Internal Memo Friedman Jewelers To: Chief Executive Officer From: Independent auditor 27th October 2014 Subject: Understatement of bad debts Facts Upon review of the information that relates to accounts receivable, I have noticed that the write-offs have been surpassing the reserves that have been made at year-end. The documents show...
Introduction Discounting rate is rate of the investors expected return for their finances. A company can get its finance from two sources; debt and equity. Debt financing is the finance that is borrowed from parties’ other than the owners of the business (Forrest A.G., 1990). Equity finance is the capital...
Advantages of Adoption of International Accounting Standards A good number of countries around the world have already assumed the international accounting standards and others have well-stipulated plans aimed at aiding the concerned countries in adopting these standards. Many advantages are accrued by adopting these standards. For instance, the country’s multinational...
Introduction Every organisation should have a good control system so that to assist in the management of its accounts. This is a proposal that will look into the appropriate control of accounts in regard to outflows, that is, cash disbursements and pay rolls, to control the outflows of cash from...
Introduction IFRS (International Financial Reporting Standards) is a set of commands and instructions, developed by IASB (International Accounting Standards Board), to govern and offer guidelines to the accounting profession. Though different countries have their own set of accounting rules and standards, an increasing number are adopting International Financial Reporting Standards...
Introduction Audit quality refers to a wide range of concepts of interrelated factors including; the ethical standards that apply to all the accounting bodies, legal framework related to audit regulation, the auditors’ independence, the auditing and accounting standards as well as ASIC’s role in the process of audit review. There...
The Structure of the International Financial Reporting Standards Foundation The international financial reporting standards foundation is a big and independent organization, which is not profit-oriented and works in the interest of the public. The main objectives of the foundation are to develop comprehendible, enforceable, and worldwide standards in international reporting...
Introduction Break even analysis is an important tool in economics and business used for cost accounting. It explains a point where the total revenue and total cost are the same. That is, although there is no profit or loss, the opportunity cost takes care of and is expecting a profit...