Long term contracts - audit process, Auditing

Long Term Contracts - Audit Process

The authoritative document with reference to long term contracts is IAS 11: Construction Contracts and IAS 18: Revenue Recognition, and ISA 600 Reliance on the Work of another Auditor.

IAS 11 Construction Contracts

A construction contract is a contract particularly negotiated about the construction of an asset or mixture of assets that are closely interdependent or interrelated in terms of their technology, design and function or their eventual purpose or needs.

That contract often span quite than one accounting time. This provides rise to a number of accounting and hence auditing issues. The auditor must examine a schedule of each the construction contracts such the enterprise is currently engaged in, and reach a decision as to where attribute to capable losses and profits have been satisfactorily estimated.

Also the presentation of contracts in the financial statements must accord along with the IAS. Even though the auditor should have a working knowledge to be capable to deal along with many aspects of long term contracts, it may be essential to contact external experts to seek assurance in specialist areas wherever the auditor has not enough expertise himself. Assume an example, determination of the stage of completion of a building in course of construction.

Posted Date: 1/28/2013 12:05:14 AM | Location : United States







Related Discussions:- Long term contracts - audit process, Assignment Help, Ask Question on Long term contracts - audit process, Get Answer, Expert's Help, Long term contracts - audit process Discussions

Write discussion on Long term contracts - audit process
Your posts are moderated
Related Questions
Dealings with Directors and Other Parties - Sundry Debtors and Loans Dealings along with directors and other related parties: The auditor's duties are follows as: i. The revi

Valuation and Petty-cash - Cash and Bank Balances Valuation Till recently, valuation of banks and cash balances was got for granted till several financial institutions st

The Concept of Audit Evidence Auditing is an evidence gathering exercise. It is an exercise carried out to confirm the assertions made by the management in carrying out the man

Pension Funds - Specialized Audit Situation Pension funds are set up through companies or another organization: (a)  To retired employees to administer the pension payable

Work In Progress What such applies to goods for resale applies uniformly to work in progress even when the items present greater problems of valuation and ascertainment to the

Higher  normal risk Several audit assignments involve high audit risk and usually in any client there will always be at least one high risk area.  Indications that an audit has

procedures for verifying a fixed assets

Providers of Funds A further point to note is that modern companies can be very large with multinational activities. Preparing accounts for such a group becomes a very complex

Techniques of obtaining evidence ISA 500 mentions them as: (a) Inspection of records or documents, (b) Inspection of tangible assets, (c) Observation, (d) Inquiry, (e) C

Firm valuation refers to the total value of a firm in the capital market. It is the stock price of a firm times its outstanding shares. Total value of a firm is also called market