Accounting concept and records-consistency, Auditing

Assignment Help:

What fundamental accounting concepts must you keep in mind in preparing to carry out your audit?

Accounting Concept and Records

Fundamental Accounting concepts are covered in IAS-1 Presentation of Financial Statements.

Matching Concepts

There is basic assumption that all costs have been matched to the revenues they helped to produce from balance sheet point of view this means that accrual, prepayments will be necessary to ensure that costs and revenues are matched correctly.

Going Concern

The financial statements of the business should have been prepared on going concern basis. This primarily affects the value of the assets in statement of financial position of valuation on a breaking basis, where assets are sold individually for guide return would be much lower than their going concern valuation.

Consistency

Accounting Policies and procedures should be applied consistently from year to year and in relation to similar items with in financial statements. This mean that is expected that one say 2 similar fixed assets are accounted in same way in financial statements.

Prudence

The financial statements should have beet prepared on prudent basis, with all anticipated losses provided for but no profits anticipates. Where the prudence and matching concepts come into conflict then the prudence concept should prevail.

Materiality

Financial statements should disclose all material items. An item is material if its non disclosure, misstatement or omission would be likely to affect evaluation on decision of users.

Substance Overform

It requires that assets acquired but business under finance lease arrangement should be recorded in its books along with obligations there against.


Related Discussions:- Accounting concept and records-consistency

Forms of evidence, Forms of evidence a) Observation: is usually witne...

Forms of evidence a) Observation: is usually witnessing internal control and book-keeping procedures. It includes attendance at wages pay out. Observation of stock-take, open

Demonstrate knowledge of the current tax-auditing , 1. Demonstrate knowledg...

1. Demonstrate knowledge of the current tax, auditing and accounting issues that concern governmental and not-for-profit entities 2. Explain the difference between various funds (

Strategic audit, A. Board of Directors Best Buy's Board is elected by th...

A. Board of Directors Best Buy's Board is elected by the shareholders to oversee the business and affairs of the company.  The board counsels, advises and oversees management wi

Explain the different auditing procedures, Problem : As per the Field S...

Problem : As per the Field Standard (INTOSAI), competent, relevant and reasonable evidence should be obtained to support the auditor judgement and conclusions regarding the org

Steps to preparing the audit, With reference to the case study business, pl...

With reference to the case study business, plan an audit. You should make specific reference in your plan to: Scope of the audit Materiality Risk factors including fra

Steps in critical thinking principle, Step 1: Determine learning objective...

Step 1: Determine learning objectives. Considering the importance of a course, its placement in a program of study, and its role in providing a base of knowledge to be built upon

Investment - audit process, Investment - Audit Process The investment ...

Investment - Audit Process The investment is held for wealth generation that as interest and dividends on shares and capital growth and loan notice.  Recent investments are re

Audit evidence, State four factors considered determining sufficiency of a...

State four factors considered determining sufficiency of audit evidence

Pinnacle manufacturing Part 1, I have a auditing case study i need to compl...

I have a auditing case study i need to complete in chapter 8 of Auditing & Assurance service (fifteenth edition) by Alvin A. Arens, Randal J. Elder and Mark S. Beasley. I don''t kn

Attempts to define true and fair, Attempts to define True and Fair It...

Attempts to define True and Fair It must be concluded that there has been slight attempt precisely to define fair and true. The Companies Act needs an auditor to report in

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd