Overview: Auditors normally perform account receivables confirmation to confirm accounts receivables recorded in the client’s financial statements. This confirmation also seeks to confirm the accuracy and existence of the accounts balance that is outstanding at the reporting date. Normally, the account receivables report in the financial statements is considered a significant and sensitive area by […]
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Definition: Averages total assets is the average book value of the entity’s assets over the different reporting dates. Normally, the value of assets at the reporting date is shown in the balance sheet of the entity. These assets include book current and fixed assets. Averages total assets are normally used to assess the return on
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Definition: Return on average assets is the profitability ratios that used to assess the profitability that an entity could earn or generate from the average of total assets for the period of time. This ratio use entity’s net income for the period of time that analyst want to assess and then compare to average of
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Overview: Increasing or maintaining return on assets is one of the most important tasks that need serious attention from senior management of most big corporate companies. This is because of this ratio interested by the majority of shareholders, prospective investors, the board of directors, the management team, and staff. Yet, a group of stakeholders who
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Return on assets is the efficiency ratio that is used to measure the company using its assets to generate income. This ratio is calculated using the bottom line (net income or net losses) that the entity generates during the period compared with the average total assets. There are many important factors that why this ratio
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Definition: A compliance audit is the type of audit service that their performance or procedure is mainly focusing on whether the entity complies with local law, regulation, and related rules. A compliance audit also reviews whether an entity complies with internal rules, regulations, policies, decisions, and procedures. An entity is required to comply with the
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Definition: Operational audit is the type of audit service that the review is mainly focused on the key processes, procedures, system, as well as internal control which the main objective is to improve productivity, as well as efficiency and effectiveness of the operation. The operational audit has also targeted the leak of key control and
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Definition: A forensic audit is the kind of financial information investigation service provided by professional forensic accounting firms which are normally required by entities as the result of legal purposes. A forensic audit is normally required to have many skills and backgrounds that add up to the auditing and accounting skill. In general, a forensic
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Definition: External audit or external auditor refers to the CPA firm or people who are working in the CPA firm that perform audit services to their client. Both assurance and advisory such as financial audit, statutory audit, internal audit, tax consultant, and more. The reason behind calling them the external auditor is because they are
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Overview: Financial ratios are the tool that uses to assess an entity’s financial healthies. There are many types and classes of financial ratios that use or tailor based on their requirement. For example, profitability ratios are the group of financial ratios that use to assess an entity’s profitability by comparing certain performance again competitors as