...accounting system. The accounts are usully organized into the following sequence. 1. Asset accounts Examples: * Cash | (Amount of cash on hand) | * Accounts Receivables | (Amount owed to the company for services performed or products sold, where the cash has not yet been received) | * Property and Equipment | (Amount of land, buildings and equipment) | * Prepaid Insurance | (Insurance paid in advance, but not yet used) | 2. Liability accounts Examples: * Accounts Payable | (Amount owed to suppliers of goods or services that the company received but has not yet paid) | * Unearned Revenues | (Amount received in advance for goods that the company did not deliver yet or for services that the comapny did not produce yet) | * Salaries Payable | (Amount owed to employees for work performed but not yet paid) | 3. Stockholders' Equity accounts Examples: * Capital Stock | (Amount the company received from investors when it issued stock) | * Retained Earnings | (Accumulated net income that has not been distributed as dividends) | * Dividends | (Amount distributed to stockholders) | 4. Revenue accounts Examples: * Sales | (Amount earned from selling goods to customers) | * Service Revenue | (Amount earned from providing services to clients) | 5. Expense accounts. Examples: * Salaries Expense | (Amount earned by employees for work already done) | * Advertising...
Words: 1296 - Pages: 6
...Compilation of Financial Statements 2011 AR Section 80 Compilation of Financial Statements Issue date, unless otherwise indicated: December 2009 See section 9080 for interpretations of this section. Source: SSARS No. 19 .01 This section establishes standards and provides guidance on compilations of financial statements. The accountant is required to comply with the provisions of this section whenever he or she is engaged to report on compiled financial statements or submits financial statements to a client or to third parties. Establishing an Understanding .02 The accountant should establish an understanding with management regarding the services to be performed for compilation engagements1 and should document the understanding through a written communication with management. Such an understanding reduces the risks that either the accountant or management may misinterpret the needs or expectations of the other party. For example, it reduces the risk that management may inappropriately rely on the accountant to protect the entity against certain risks or to perform certain functions that are management's responsibility. The accountant should ensure that the understanding includes the objectives of the engagement, management's responsibilities, the accountant's responsibilities, and the limitations of the engagement. In some cases, the accountant may establish such understanding with those charged with governance. .03 An understanding with management and, if applicable...
Words: 10549 - Pages: 43
...2015 Subject: Similarities and differences between financial and managerial accounting Hello Susan, I wanted to start by saying welcome aboard. We are glad to have you as a part of the team hear at EEC and I am sure with your experience and accounting background you are going to be a perfect fit. I do understand that you have spend most of your career working in a financial accounting office preparing journal entries, and you have a great understanding of financial accounting however you have no experience with managerial accounting. I am providing this memo in hopes of giving you with an explanation of the similarities and differences between financial and managerial account, give an example of managerial accounting reports, show how management might use information to make decisions and show an example of the horizontal analyzes, vertical analyzes and ratio reports. People may think that financial and managerial accounting is the same thing. On the surface, the actual number crunching of financial data contains a lot of similarities and both accounting types use much of the same data. While it is true there are some similarities, there are also some distinct differences. By taking a closer look at both types of record keeping, these differences become a bit more apparent as they each serve their own function and purpose. |Managerial Accounting |Financial Accounting ...
Words: 1032 - Pages: 5
...INTERNATIONAL STANDARD ON AUDITING 700 FORMING AN OPINION AND REPORTING ON FINANCIAL STATEMENTS (Effective for audits of financial statements for periods beginning on or after December 15, 2009) Introduction Scope of this ISA 1. This International Standard on Auditing (ISA) deals with the auditor’s responsibility to form an opinion on the financial statements. It also deals with the form and content of the auditor’s report issued as a result of an audit of financial statements. 2. ISA 7051 and ISA 7062 deal with how the form and content of the auditor’s report are affected when the auditor expresses a modified opinion or includes an Emphasis of Matter paragraph or an Other Matter paragraph in the auditor’s report. 3. This ISA is written in the context of a complete set of general purpose financial statements. ISA 8003 deals with special considerations when financial statements are prepared in accordance with a special purpose framework. ISA 8054 deals with special considerations relevant to an audit of a single financial statement or of a specific element, account or item of a financial statement. 4. This ISA promotes consistency in the auditor’s report. Consistency in the auditor’s report, when the audit has been conducted in accordance with ISAs, promotes credibility in the global marketplace by making more readily identifiable those audits that have been conducted in accordance with globally recognized standards. It also helps to promote the user’s understanding...
Words: 10038 - Pages: 41
...of financial statements for periods beginning on or after December 15, 2009) CONTENTS Paragraph Introduction Scope of this ISA ...................................................................................... Subsequent Events .................................................................................... Effective Date ........................................................................................... Objectives ................................................................................................ Definitions ................................................................................................ Requirements Events Occurring between the Date of the Financial Statements and the Date of the Auditor’s Report ........................................................ Facts Which Become Known to the Auditor after the Date of the Auditor’s Report but before the Date the Financial Statements are Issued ........................................................................................... Facts Which Become Known to the Auditor after the Financial Statements Have Been Issued ............................................................ Application and Other Explanatory Material Scope of this ISA ...................................................................................... Definitions ................................................................................................ Events Occurring between the Date of the Financial Statements...
Words: 4089 - Pages: 17
...Financial Management for NPO I. Introduction “Ten years ago, management was still a dirty word for those involved in nonprofit organizations. Nonprofits prided themselves on being free of the taint of commercialism and above such sordid considerations as the bottom line… Today, nonprofit organizations have learned that they need management and leadership even more than business does…” (Montana and Petit, 2009) The years when “management” was a prohibited word in nonprofit organizations are long gone. Nowadays, nonprofit leaders are starting to realize what an essential role financial management plays in NPOs. Moreover, as the number of nonprofit organizations around the world keeps rising, more nonprofit leaders and managers have aimed to develop their skills in financial management. As a matter of fact, the nonprofit sector is one of the fastest-growing sectors around the world: just in the United States there are 1.5 million nonprofit organizations and growing, employing one in 10 American employees. In this paper, we will look at: 1) the financial management process, 2) the importance of financial management for nonprofit organizations, 3) financial management for nonprofits organizations. II. What is Financial Management? One of the most accepted definitions of financial management was given by Kuchal, stating that “Financial Management deals with procurement of funds and their effective utilization in the business” (as cited in Paramasivan & Subramanian...
Words: 2485 - Pages: 10
...Control Over Financial Reporting The Center for Audit Quality prepared this Guide to provide an overview for the general public of internal control over financial reporting (“ICFR”). The Guide explains what public company ICFR is and describes management’s responsibility for implementing effective ICFR. The Guide also discusses the responsibilities of the audit committee to oversee ICFR and of the independent auditor to audit the effectiveness of the company’s ICFR. A Guide to Internal Control Over Financial Reporting P reparing reliable financial information is a key responsibility of the management of every public company. The ability to effectively manage the company’s business requires access to timely and accurate information. Moreover, investors must be able to place confidence in a company’s financial reports if the company wants to raise capital in the public securities markets. Management’s ability to fulfill its financial reporting responsibilities depends in part on the design and effectiveness of the processes and safeguards it has put in place over accounting and financial reporting. Without such controls, it would be extremely difficult for most business organizations — especially those with numerous locations, operations, and processes — to prepare timely and reliable financial reports for management, investors, lenders, and other users. While no practical control system can absolutely assure that financial reports will never contain...
Words: 4333 - Pages: 18
...Going Concern issues in financial reporting: a guide for companies and directors Published in 2009 by: Australian Institute of Company Directors (AICD) Level 2 255 George Street Sydney NSW 2000 Telephone: (+61 2) 8248 6600 Facsimile: (+61 2) 8248 6633 www.companydirectors.com.au publications@companydirectors.com.au Auditing and Assurance Standards Board (AUASB) Level 7 600 Bourke Street Melbourne VIC 3000 Telephone: (+61 3) 8080 7400 Facsimile: (+61 3) 8080 7450 enquiries@auasb.gov.au www.auasb.gov.au © Australian Institute of Company Directors (AICD) © Auditing and Assurance Standards Board (AUASB) © Financial Reporting Council (UK) 2009. Portions of this publication have been adapted and reproduced from an Auditing Practices Board Bulletin: Going Concern Issues During the Current Economic Conditions (December 2008) with the kind permission of the Financial Reporting Council (UK). All rights reserved. For further information please visit www.frc.org.uk or telephone +44 (0)20 7492 2300. © Portions of this publication have been adapted and reproduced from a KPMG Flash Report: How Concerned Should Directors be with Going Concern? (February 2009) with the kind permission of KPMG. All rights reserved. Typeset by Endnote design Printed by Ligare Pty Ltd National Library of Australia Cataloguing-in-Publication entry Going Concern issues in financial reporting: a guide for companies and directors/AICD, AUASB ISBN 9781876604158 (pbk.). 9781876604172...
Words: 15500 - Pages: 62
... * What is the difference between transaction processing systems, management information systems, and decision support systems? 2. Transaction processing systems - document financial activities 3. Management information systems - used to collect qualitative as well as quantitative information for decision making within organizations 4. Decision support systems - help the developers of an AIS identify what information they need for their planning, decision making, and control functions * How is a flowchart used? 5. A document flowchart traces the physical flow of documents through an organization—that is, the flow of documents from the departments, groups, or individuals who first created them to their final destinations. * How is the accounting information system documented? 6. An accounting information system is a collection of data and processing procedures that creates needed information for its users. An information system's components: Data or information is input, processed, and output as information for planning, decision-making, and control purposes. 1. Data flow diagrams provide both a physical and a logical view of a system, but concentrate more on the flow and transformation of data than on the physical devices or timing of inputs, processing, or outputs. 2. A document flowchart describes the physical flow of documents through an AIS, for example, by providing an overview of where documents are created, sent, reviewed...
Words: 12288 - Pages: 50
...AUO1 – Auditing and Information Systems Additional Study Questions Accounting Information Systems Competency 302.1.1: Nature and Purpose The student understands the nature and purpose of information systems. * What is the difference between transaction processing systems, management information systems, and decision support systems? Transaction processing systems - document financial activities Management information systems - used to collect qualitative as well as quantitative information for decision making within organizations Decision support systems - help the developers of an AIS identify what information they need for their planning, decision making, and control functions * How is a flowchart used? A document flowchart traces the physical flow of documents through an organization—that is, the flow of documents from the departments, groups, or individuals who first created them to their final destinations. * How is the accounting information system documented? An accounting information system is a collection of data and processing procedures that creates needed information for its users. An information system's components: Data or information is input, processed, and output as information for planning, decision-making, and control purposes. Nine reasons to document an AIS are (1) to explain how the system works, (2) to train others, (3) to help developers design new systems, (4) to control system development and maintenance costs, (5) to standardize...
Words: 12321 - Pages: 50
...Basic Financial Statements Jane Antonovsky Colorado Technical University Online Instructor: Dr. Tracie C. Edmond ACCT614-1301A-02: Applied Managerial Accounting January 14, 2013 Abstract The Board of Directors and executive management team of Sparklin Automotive Company (SAC) need to make informed and accurate decisions regarding the management of the enterprise, therefore it is up to the corporate business financial analyst to provide the financial information essential to that decision-making process. In this memo, we will review the basic financial statements that must be submitted to the Board of Directors and executives, as well as what each statement contains. Furthermore, we will evaluate how the information contained within these statements will be useful for the management as far as helping them in the enterprise management. As in most processes, there is maximum and minimum that can be achieved, therefore we will review specific limitations of the information provided within these statements. In addition, management team must be aware of the possible information limitations, as well as how they can make sure that they receive whole picture of the enterprise. * Some work repurposed from ACC350-1101B-01, Instructor: Johnnie Bannier, 2/17/2011 Basic Financial Statements This memo will address the basic financial statements that must be submitted to the Board of Directors and executives of SAC, as well as what each statement does and contains within...
Words: 2596 - Pages: 11
...FINA425 – Budgeting January 24, 2016 Abstract This is a research paper about financial budgets. This research paper talks about a management director would establish policies and system for a business and/or organization. This research paper will help to explain the different style of budgets, budget cycles and the guidelines rules for set up a financial budget for a business and/or organization. Unit 3 Individual Project Introduction This is a report from the management director to establish policies and systems for the new business, I Can Business Incorporated (ICBI). This report will be delivered to the board of directors of ICBI. This report will describe what a financial reporting system is and explain how management for ICBI should use an activity based budget instead of an operating budget. This report also gives examples of budget guidelines for ICBI. Describe the meaning and the components of a financial reporting system Financial reporting is the process of compiling statements that shows a glimpse of an organization’s financial “health” or status to management, investors and the government. There are four basic reports that are included in a financial report. There is a balance sheet, an income statement or sometimes called the profit & loss statement, a cash flow statement and a statement of shareholder’s equity. The balance sheet gives a detailed picture of the financial condition of a business at a specific period of time. The balance sheet tells...
Words: 1764 - Pages: 8
...Introduction: The primary purpose of financial and accounting management is to organize, plan, control and direct the financial and accounting activities, but to ensure that every stakeholder is adequately served. The effectiveness of financial and accounting management, therefore purely depends on the policies, regulations and frameworks that are designed and being evolved from time to time. According to Gray, Owen and Adams (1996) financial management is the core business discipline which is meant to ensure that financial resources are deployed in the most effective manner, within the best interest of every group of stakeholder. Moreover, the importance the financial management also increases in current business context because of the fact that economic and financial contexts have become uncertain and unpredictable in every region across the world. At the other end, financial management also supports the business activities and operations which include investment decision making, pricing, financial reporting as well as to meet the legal and regulatory obligations. This report also focuses on the different aspects of financial analysis and management to reflect its validity, reliability and usability in practice. The purpose of this report is to understand and examine the different aspects of financial management, which will be helpful to understand the effectiveness of financial management and its different aspects. In order to achieve the report’s objectives, below paper...
Words: 3024 - Pages: 13
...Financial Analyst Report Furman Glass Prof. Arlene Goodman ACCT614-1302A-06 Colorado Technical University April 15, 2013 Abstract Financial Analyst Report The associates of a corporation’s board of directors and executive management team are liable for establishing the policy, procedures and are eventually accountable to stockholders for the financial well-being of the corporation. Too successfully conduct their responsibilities, panel associates must have appropriate data in the structure of financial statements or narrates that afford a complete summary of the corporation’s financial position. The fundamental material associates of a board of directors and executive management team members require to make a comprehensive decision on the operating future and standing of the Corporation are located in four essential financial statements. These statements are the balance sheet, income statement, cash flow statement and the statement of shareholders’ equity. Annual accounts of all must be encompassed in the corporation’s yearly statement (Gillett, (n.d.)). Provisional reports of the financial statements are likewise beneficial to a board of directors and executive management team and they are produced typically on a quarterly agenda. Obviously, the board associates will utilize these various statements and other financial accounts to reach a comprehensive decision. Nonetheless, the four essential financial reports afford the summarizing material essential...
Words: 1874 - Pages: 8
...division: Jason Dennis, Sales Manager (supervises all sales representatives) Dave Marley, Cost Accounting Manager (supervises cost accountants) Kevin Carson, Production Supervisor (supervises all manufacturing employees) Sally Renner, Engineer (supervises all new-product design teams) REQUIRED a) What are the primary information needed by each manager? Give examples. (5 Marks) b) Which, if any, financial accounting report(s) is likely to be used by each manager? Explain. (3 Marks) c) Name one special purpose management accounting report that could be designed for each manager. Include the name of the report, the information it would contain, and how frequently it should be issued. (7 Marks) [TOTAL 15 MARKS] Grading Rubrics for Assignment Question 1: (5) (4) a) primary Clear and Clear and information detailed adequate needed by explanation of explanation of each the primary the primary manager information information needed by needed by weightage: 1 each manager each manager with some with some examples. examples. b) financial Clear and Clear and accounting detailed adequate report(s) explanation of explanation of the...
Words: 1803 - Pages: 8
