Accounting Trends & Techniques Products

These are the tools of choice for financial reporting and have an unmatched legacy of innovation and practical application. Filled with current reporting techniques and methods, these provide illustrative presentation and disclosure examples from actual financial statements. These must-have resources deliver time saving guidance and practical examples for all users—preparers, practitioners, investors, analysts, and academics.

The AICPA publishes guidance in both electronic and print formats, designed to be useful wherever you are—in the office, in the field, or on the go.

• eXacct: Financial Reporting Tools & Techniques: A powerful new Web-based tool, eXacct provides guidance on satisfying U.S. GAAP presentation and disclosure requirements. Built on the framework of the best-selling Accounting Trends & Techniques, eXacct shows statistical reporting trends and actual reporting examples from the AICPA’s survey of annual reports from 500 of the country’s top public companies. A subscription to this robust online tool allows you to search, browse, filter, download, and use the data exactly as you need it.
• Accounting Trends & Techniques: As the flagship member of the series, this long-standing publication captures today's prevailing financial reporting practices with hundreds of illustrative examples from the actual financial statements of the country's most prominent publicly traded companies. Fully updated with all new presentation and disclosure examples, as well as technical guidance on financial reporting requirements, you get the tools you need to apply the complex reporting guidance within U.S. GAAP, including statistical data revealing the latest trends in presentation and disclosures.
• IFRS Accounting Trends & Techniques (U.S. Edition or Global Edition): This IFRS resource provides a close look at the reporting practices of international companies that have already tackled the conversion to IFRS. It presents carefully selected reporting examples from the audited annual reports of more than 170 entities filing under IFRS to illustrate current reporting techniques and various presentation and disclosure practices. Two editions of this useful resource are available: a U.S. edition, which includes IFRS comparisons to U.S. GAAP financial reporting requirements, and a global edition, which focuses only on IFRS.
• Accounting Trends & Techniques—Employee Benefit Plans: This industry-specific resource provides a multitude of illustrative disclosures for financial statements of employee benefit plans.
• Accounting Trends & Techniques—Not-for-Profit Entities: For more than 55 years, this industry-specific resource has provided a multitude of illustrative financial statement presentations and disclosures useful to preparers of financial statements for not-for-profit entities.

Audit and Accounting Manual

The Audit and Accounting Manual is developed exclusively for small- and medium-sized CPA practices and contains useful techniques and procedures conducted by engagement practitioners. The manual explains in a practical, plain English format engagement steps, including planning and performing procedures and issuing reports. It also provides guidance for internal controls and illustrative reports for confirmation letters, engagement and representation letters, and auditor's reports.

Audit and Accounting Manual also includes all Audit Risk Alerts published by the AICPA, including Audit Risk Alert Communicating Internal Control Related Matters in an Audit—Understanding SAS No. 115 and Audit Risk Alert General Accounting and Auditing Developments. Audit Risk Alerts keep auditors updated on recent practice issues and professional standards that affect industry specific engagements. Audit Risk Alerts also help auditors identify significant business risks that may result in the material misstatement of a client's financial statements.

The AICPA publishes guidance in both electronic and print formats, designed to be useful wherever you are—in the office, in the field, or on the go.

Accounting Basics: Assets

 As hinted in my previous entry, the balance sheet is comprised of three basic sections: assets, liabilities and owners equity. Assets are resources or items of value owned by the business. They are items of value which can be used or exchanged in the production or delivery of services of the business.

Typically, the most common asset people think of is cash. Cash can be exchanged to purchase office supplies, raw materials used in production, pay employees, etc.; thus it is an asset of the business. Machinery is another asset; it is used in the production of the goods or services delivered by the business.

Substantial effort is made by accountants in valuing assets; some of which may not have a clear current value. For example, a piece of equipment purchased five years ago for $100,000 and used daily in the operation of the business is not worth $100,000 today (in the same way that a five year old car is not worth the price paid for it when it was new). In this instance, accountants use depreciation to adjust the value of a 'fixed asset' such as this (to be discussed later).

I am a career woman, and at the same time as a manager

 Almost as common a term as cash nowadays, accounts receivable is an accounting term meaning amounts owed to a business by other business or customers (individuals or otherwise). An accounts receivable arises anytime when goods are sold but cash is not received immediately; thus when you purchase something for cash at Walmart you are not creating an accounts receivable. If you commit to purchase something (say a lawnmower) and you are offered the option to pay next month, now you have created an accounts receivable on the retailers books.

Unlike a note receivable (to be discussed next), there is generally no signed agreement beyond an invoice for an accounts receivable. They are generally short term in nature (less than a year, if not only a couple months). Because of their short term nature, they are generally listed as a current asset on the balance sheet next after cash.

Accounting principle- Accrual Basis

 Figures generated / kept in accordance to accounting principle is prepared on accrual basis. For instance, accountant record the provision for warranty ( based on estimate) even though there's no actual cash/ economic outflow yet.

In finance, cash basis figures are more relatively more valuable , as compared to accrual basis ( advocated by accounting principle), in order to value a business.

What do you think ? You prefer a an accrual method or cash method in valuing a business?

Auditing Creditors- Creditor Turnover Analysis

 In audit, it's essential to form an expectation of the Company's results before we really drill into the details. We compare the actual Company's results to our expectation, and investigate the variances accordingly. This is the analytical procedures adopted by most of the audit Company. Besides, we also compare the result / financial position with prior period.

Creditors' turnover anlaysis is one of the auditing procedure we performed. What are we expecting from the audit client, in general. We expect the creditors turnover (days) to increase, as compared to prior period.

To illustrate, majority of our audit clients are affected by the economy turmoil. They are squeezing suppliers' credit ( by delyaing the repayment), in order to maintain the Company's working capital, as our audit client's working capital are most likely affected by the delay of repayment from customers.

We have formed an expectation, and we will compare the actual result with our expectation. Any unusual movements need to be identified.

Auditing: Annual Budget vs Actual Results

 Company prepare budget and use budget as a performance benchmark and monitoring tools. For instance, senior management can question sales department if their actual yeat-to-date entertainment has exceeded the budget before the end of the year. Budget is , usually, prepared and approved at the beginning of the year or before that.

Budget has incorporated management's forecast, estimation and outlook of the business in the coming times.

Is management's budget useful to auditor?

The answer is yes. Budget, which represents management's expectation, should be compared against the actual results. Significant variances should be investigated. Apparently, management would have to explain the variances. It's important for auditor to find out the reason of the variances to identify potential changes in business operation, significant developments during the year.

Understanding how management view the business (by looking at the budget) is a crucial stage in audit planning, it enhance our knowledge and understanding on the business, the industry and the overall economy as a whole.