The sales and collections cycle in a business refers to the set of processes that begin when a customer purchases goods or services and ends when business receives payment in full. As part of the year-end audit of your financial statements, external accountants test sales transactions and the internal controls over those transactions to ensure…
Category: Audit services
Inventory Process Audit
Receipt of Material & Quality Checks Review of the gate entry for the incoming material in the inward gate register. Ensure that the weighment / Counting of the incoming material is made properly and correctly at the receiving section. Verify that stamp / acknowledgement of the receipt of the incoming material. The remark should indicate…
How Auditors Can Test Inventory in the Coronavirus Times
As per SA 501 “Audit Evidence – Specific Consideration for Selected Items”auditor is required to conduct Physical Inventory at least once a year. Due to coronavirus pandemic auditors could not attend Physical Inventory at the year end thus posing a threat to integrity of Financial Statements and audit credibility. Conducting Physical Verification There are two…
COVID-19 Impact on Financial Statements
The impacts of the outbreak on financial statements will depend on facts and circumstances, including the degree to which a business operation is exposed, and the sensitivity of amounts recorded in the financial statements to the volatility of economic conditions. This article looks at some of the aspects that needs to be considered by the companies…
Materiality
Due to practical limitations, any auditor cannot carry out the examination of all the transactions and balances, so materiality ensures covering the transactions significant enough to influence the decisions of the users of the financial statements. Also, materiality is an essential concept since, materiality and audit risk are directly related i.e., higher the level of…
Impairment of Assets
In this dynamic business environment, the real market value of the assets that a business presents in its financial statements does not stay intact. The market value of the assets might be different as compared to their carrying amount. If there are some indications about the permanent downside in the market value of the assets…
IND AS 116 – LEASES
The Ministry of Corporate Affairs (MCA) has notified Ind AS 116, the new Indian Accounting Standard on Leases as on 30th March 2019. This Ind AS -116 replaces the current guidance in Ind AS-17, ‘Leases’. This amendment is effective from on 1st April 2019. Ind AS Definition: Ind AS-116 defines a lease as a contract, or part of a…
Key Audit Matters
With the purpose of enhancing the communicative value of auditor’s report by offering better transparency about audit and providing additional information to the users of financial statements, for the first time, audit reports of listed companies for the Financial year 2018-19 will contain a Key Audit Matters (KAM) as per Standard on Auditing (SA) 701….