What is Revenue? Revenues that the entity recognizes in the income statement during the year are the income that the entity sells the goods or services to its customers. These revenues are recognized when the control is passed from the entity to its customers. It is recognized either when the customer pays immediately or is […]
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Definition: Search for unrecorded liabilities is the audit testing procedure that auditors perform to verify if there are liabilities that exist at the reporting date and are not recorded in the company’s financial statements. Auditors perform such tests of the search for unrecorded liabilities to give an appropriate response to assess the risk of understatement
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Auditing is the examination that conducts by independent and competent auditors and it ranges from operational, financial, internal control, and so on. A financial audit is generally for the purpose of requirements from the management, directors, and shareholders of the company. The company that operates in a different jurisdiction is having a different obligation to
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Audit Definition: The word audit is derived from the Latin “Audire” which means “Hear”. The audit is the Process by which competent individuals examine accounting records to form an opinion and generate the audit report. The objective of the Non-Statutory Audit: The main objective of an audit is the assessment of financial statements prepared with
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Journaling entry testing: The need for journal entry testing arises when the auditor needs to test the nature, timing, and extent of journal entries. It is done to recognize the risk of material misstatement due to fraud while recording financial transactions. The auditor should be vigilant in its audit of transactions and look at all
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Meaning of expenses Expenses are those transactions that result in decreases in the entity’s assets or increases in the entity’s liabilities which are normally decreasing in equity rather than those transactions that relate to distributions to holders of equity claims such as dividend distribution. Expenses are reduced from the total revenues to get net profit
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Auditing Debt Debt is simply liabilities, the amount the company owes to someone. Auditing of debt requires an understanding of complex debt instruments, classification of debt as per covenants, and characteristics of debt. In the financial statements, the debit balance at the reporting date is reporting the balance sheet under current or non-current liabilities depending
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What is an audit procedure? Audit procedures also referred to as audit programs involve the procedures, methods, and strategies that auditors implement in order to achieve audit confirmation. It assists them to deduce if the audit objective was fulfilled according to the given data. Auditing is carried out in three steps: Step 1 – Recognize the statement claim being
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Going Concern Concept There are many different concepts that companies must follow when it comes to accounting. One such concept is the Going Concern concept. The going concern concept of accounting requires companies to prepare their financial statements based on the assumption that they will stay in the company for the foreseeable future. Staying in
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The Payment Card Industry Data Security Standard (PCI DSS) is a globally used security standard that was introduced and is still governed by the Payment Security Industry Security Standards Council (PCI SSC). The standard was introduced by the council to tackle the risk of card fraud. This standard applies to all businesses that process, store,
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