Accounting is a profession with a broad scope. Accountants work in all fields and industries. Since every company or organization deals with financial information, they need accountants to overlook their finances. Usually, accountants need to qualify and have a degree to get a job in any field. However, some fields do not require any specific […]
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The term audit refers to examination or investigation. In practice, however, it is much more. An audit is a process through which independent auditors assess a subject matter. Usually, this subject matter includes financial statements. During the audit process, auditors collect audit evidence and evaluate the financial statements based on various criteria. The primary objective
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Overview: The audit is an art of systematic and independent review and investigation on a certain subject matter, including financial statements, management accounts, management reports, accounting records, operational reports, revenues reports, expenses reports, etc. The result of reviewing and investigation will be reported to shareholders and other key internal stakeholders of the entity for their
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Whenever a business is set up, it sets several rules, protocols, and SOPs. The business norms comply with every business entity to have an internal control system that regulates how the company will act. The internal control system comprises the set rules on how the company will act to safeguard the company’s interest and prepare
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The audit process spreads over a vast range of activities. External auditors conduct an audit of a business entity to safeguard the interests of the stakeholders. For instance, consider shareholders, creditors, debtors, investors, governments, regulators, and other stakeholders. A business entity’s fair and successful operations and a transparent internal control system guarantee that stakeholders’ interests
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Meaning of Accounts receivables Accounts receivables generally mean Trade receivables in the financial statement of large listed public companies. Accounts receivables are disclosed under the headings “Current Assets”. These are trade or non-Trade receivables that have been specified by the company or regulations and meet the criteria of being classified separately. Accounts receivables are characterized
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Meaning of materiality There is no specific definition of materiality under U.S. Generally Accepted Accounting Principles (GAAP). However, the gist per the Conceptual Framework for Financial Reporting under International Financial Reporting Standards states that information is to be considered material if it influences the decisions of stakeholders who depend on the financial information of the
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Meaning of retained earnings The company operates in a business environment and strives to obtain higher and higher profits each year. The net profit is obtained by deducting the expenses from the revenues. These net profits are appropriated to reserves and surplus. Such profits when transferred to reserves and surplus after paying off the dividend
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Meaning of share capital Share capital is the amount invested by a company’s shareholders for use in business operations. After the company’s creation, the shareholders bring in the contribution through cash or in-kind which is shown on the balance sheet on the liability side as an equity account. Share capital is also called shareholders’ capital,
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Meaning of Investments Investment is the deployment of capital in order to earn interest, dividend, or capital appreciation. Investments are basically either held to maturity or available for sale securities. Held to maturity securities are those that are held with intent until maturity. These are reported at cost, provided for amortization and accretion of discounts.
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