Sunday, 26th May 2013

bin card, store ledger, ledger, journal

Basic Differences between Bin Card and Store Ledger

Bin Card: Bin card is a record of receipt and issue of store inventory materials. Bin card is also known as cardex. Bin card shows the balance of quantity of stores is ascertained after every receipt or issue. Bin card is maintained by storekeeper. When any kind of store material is needed by the specific …

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fixed cost, variable cost, step variable cost, mixed cost

Difference between Fixed Costs and Variable Costs

Fixed Costs: Fixed costs are those costs which do not vary with volume of output and therefore fixed costs are defined in terms of daily, weekly, monthly and even yearly. These remain constant throughout the relevant range. For example if fixed cost of a company is $5000 and company produces whether 10000 units or 20000 units, …

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electronic commerce, E-commerce, digital products, digital business

What are the Key Benefits of Using E-commerce

The Internet has opened up a new horizon for trade and commerce, namely electronic commerce (e-commerce). E-commerce entails the use of the Internet in the marketing, identification, payment and delivery of goods and services. Using electronic commerce business organizations can be able to create competitive advantage over its competitors who are not using electronic commerce feature. Now every …

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lease, capital lease, financial lease, accounting for capital lease

How Capital Lease is Treated in Accounting

Capital Leases are considered to be more like a purchase of property than a rental. As a result, the accounting for capital leases entries similar to those required for the purchase of an asset with long-term credit terms and conditions. The tax benefits are greater to the lessor than the lessees; leases offer more flexibility in terms of …

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cash flows statement, cash flow management, cash flow cycle, cash inflows, cash out flows

What is Cash Flow Cycle

Cash flow can be described as a cash flow cycle. Business uses cash to acquire resources. The resources are put to work and goods and services produced. These are then sold to customers and collect their payments and make those funds available for investment in new resources, and so the cycle repeats. Cash flow cycle …

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Basic Differences between Bin Card and Store LedgerDifference between Fixed Costs and Variable CostsWhat are the Key Benefits of Using E-commerceHow Capital Lease is Treated in AccountingWhat is Cash Flow Cycle

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Audit and Assurance

Key Concept::  

Legal, ethical and current issues: professional and ethical issues that may arise during an assurance engagement- relevance and importance of assurance engagement- possible referral to external parties- standard-setting process- non-technical language- national standard-setting body- national legislation affects the scope and nature of the audit- different auditing requirements- requirements to report on internal controls (Sarbanes-Oxley Act)- audit failure and their effects and the gap.

Accepting and managing engagements: legal, professional and ethical considerations specified assurance engagement- sources of liability arising from an assurance engagement- the scope and terms of an assurance engagement- the approach suitable for management of the assurance engagement- purpose of quality control of assurance engagements- controlled through procedures external to the organization.

Planning assurance engagements: knowledge and understanding of the business when planning an engagement- gaining knowledge and understanding of a client’s business- regulations and assess their implications for the engagement- potential impact on performance measurement- the components of risk for a specified assurance engagement- the impact of risk and materiality on the engagement plan- the benefits and limitations of analytical procedures at the planning stage- the breakdown of audit risk- the aspects of employment law, tax law and other local laws- engagement including appropriate auditing standards.

Concluding and reporting on assurance engagements: disclosure in relation to the matters being reported- assurance tests and procedures- the ability to report on an assurance engagement.

Questions and Answer Section: 

  • Briefly write on The International Auditing and Assurance Standards Board (IAASB).
  • Briefly write on The International Federation of Accountants (IFAC).
  • What are the purposes of planning an audit? Enumerate the matters which are to be considered by an auditor in developing his overall audit program.

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