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

Illegal acts, ILLEGAL ACTS Auditors may uncover criminal offences commi...

ILLEGAL ACTS Auditors may uncover criminal offences committed by a client or an employee of the client. This puts them in a difficult place, though the auditor must act careful

Definition of audit evidence, Definition of Audit Evidence "Audit evid...

Definition of Audit Evidence "Audit evidence" which is all the information used through the auditor in arriving on the conclusions on such the audit opinion is support, and in

Beneficial ownership and existence, Beneficial Ownership and Existence ...

Beneficial Ownership and Existence Existence Existence of buildings and Land is not hard to display. You may even be sitting in such building.  Conversely, the audito

Proxy, if a proxy is voted as per his judgement other than member prescribe...

if a proxy is voted as per his judgement other than member prescribed to him... what is the action to be taken?

Individual assignment, The following situations may or may not breach the e...

The following situations may or may not breach the ethical requirements of APES 110. You need to state whether they are or are not a breach of the ethical requirements of APES110 a

Counter - indications, Counter - Indications That the auditor has foun...

Counter - Indications That the auditor has found indications of going related to non-applicability does not of itself justify instantly conclusion that the entity is not a goi

Internal controls and process improvement, how do internal controls affect ...

how do internal controls affect or improve the goals of a bussiness firm

Contingencies and provisions, Contingencies and Provisions (i) Receive...

Contingencies and Provisions (i) Receive the client's schedule of provisions and seek and contingencies supporting documentation in the form of legal opinions, correspondence

Share capital - audit process, Share Capital - Audit Process Share cap...

Share Capital - Audit Process Share capital is a special type of liability and when it has been issued during the year then verification procedures are as follows: 1. Confirm

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