INTRODUCTION TO FINANCIAL ACCOUNTING

Introduction to Financial Accounting

Introduction to Financial Accounting

Accounting Standards

Abercrombie & Fitch

Abercrombie & Fitch, through its subsidiaries, is a retailer that operates stores and direct to consumer . The accounting standard being used in Abercrombie & Fitch is UK GAAP. Generally Accepted Accounting Principles (Generally Accepted Accounting Principles, GAAP) - the standards of accounting used in the United States and certain other countries. GAAP is different (in particular, from the International Financial Reporting Standards) by the fact that the GAAP accounting treatment is regulated in detail certain practical situations (Jane, 2008,). The financial year of the company represents the total of 52 weeks. The amendments, standards and the interpretation being adopted, follows the FRS interpretations. All these standards and amendments do not have any significant impact on the net assets of the Abercrombie & Fitch.

Hennes & Mauritz

H & M is engaged in the sale of clothing and cosmetics in Sweden and internationally. The accounting procedures and measurement of H & M are prepared on the nearest Saturday of 1st January each year unless of any exceptions which may occur. The financial year of the Hennes & Mauritz is of 52 weeks that ends on 31st December of every year. This is also the financial reporting period of Hennes & Mauritz. All of the consolidated financial statements including balance sheet, income statement and cash flow are prepared according to International Financial Reporting Analysis (IFRS). IFRS is one of the most adoptive accounting measures in Europe (Kaplan, 1984). International Financial Reporting Standards is a set of documents (standards and interpretations), regulating the rules of the financial statements required for external users to make economic decisions for the Hennes & Mauritz.

Auditing Standards

Abercrombie & Fitch

The audit of Abercrombie & Fitch is performed by Price water house Coopers (PWC), which is one the leading auditing firms of the world. Audit is conducted through 2 mediums, one is the internal audit and other is the external auditors. The internal audit department of the company is independent to business operations. They have nothing to do with the operations going on in the business, but to see whether it is compliant to ethical procedures and standards (John, 1996). The internal auditor of the company addresses the risk management process and internal control with the reference of Turnbull guidance. The internal audit is based on the risk methodology processes which make sure that the company's risks are ...