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

Inflation impact analysis, Please present an analysis of the attached case....

Please present an analysis of the attached case. Your analysis should be in the form of a memo not to exceed four pages plus appropriate exhibits. The memo should present your

Fraudulent financial reporting, Fraudulent financial reporting Involves...

Fraudulent financial reporting Involves intentional misstatements or errors of amounts or disclosures in financial statements to mislead financial statement users. Fraudulent f

Inter-related components of internal control, Part A: What are the five...

Part A: What are the five inter-related components of internal control? Briefly discuss them. Part B: A file maintained by the Accounts Department for one of Sharp's s

Audit evidence, why are the figures presented to an auditor not sufficient ...

why are the figures presented to an auditor not sufficient for absolute reliance

Reconcile the inventory - general ledger balance, The Tonka Manufacturing C...

The Tonka Manufacturing Company conducts its annual physical inventory at the end of the calendar year as a result of the auditor's assessment of non-operating internal controls in

Basic elements of a management representation letter, Basic Elements of a M...

Basic Elements of a Management Representation Letter Whenever requesting a management representation letter, such the auditor would request which it be addressed to the audi

How do internal auditors add to the credibility of financial, How do intern...

How do internal auditors add to the credibility of financial statements?

Documentation of representations by management, Documentation of Representa...

Documentation of Representations by Management The auditor would ordinarily involve in audit working papers evidence of management's representations in form of a summary of or

Ias 27 - audit process, IAS 27 - Audit Process IAS 27 applies to the ...

IAS 27 - Audit Process IAS 27 applies to the presentation and preparation of consolidated financial statements for a group of entities within the control of a parent. It as w

ACL PROGRAME, I have some questions in ACL PROGRAME . IF YOU CAN HELP ME

I have some questions in ACL PROGRAME . IF YOU CAN HELP ME

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