FINANCIAL ANALYSIS

Financial Analysis



Financial Analysis

Introduction

The paper attempts to discuss the concept of financial accounting in a holistic context. It focuses on the calculation of various ratios as well as portrays the idea of auditing. The paper also integrates the auditing concept of financial accounting in answering the questions.

Discussion

Today audits have gained value significant whether the state required financial statements audited companies through special superintendencyadministration tax or the board of management requesting them to give extra value to the figures shown in the states financial, which is why the importance of the work carried out by an auditor, this topic is extensively dealt with the responsibility to have the auditor at the time of an audit with respect to the detection of errors and irregularities, which comes after the detection, that have impacts on the financial statements.

The auditor is responsible for its report and must perform their work in accordance with the Standards Technical Audit established. His work is not specifically designed to detect irregularities of all kinds and amounts that have been committed and, therefore, can not be expected to be one result.However, the auditor should schedule your examination taking into account the possibility that errors or irregularities may exist a significant effect on the accounts annually.

The auditor is not and can not be responsible for the prevention of fraud or mistake, however, the fact that they carry out an annual audit, it may serve to counter fraud or error.

The existence of systems of accounting and procedures of internal control efficient reduce the possibility of errors and irregularities in the accounts, although there is always risk that internal controls may not work as designed.

The main objective is knowing what should be the goal of the independent auditor at the time of examination through to the financial statements to a private entity, in accordance with accounting principles generally accepted and applied the important elements of the audit: as evidence at trial and influence of the audit, to form an opinion whether the financial statements present fairly the financial position and that they do not contain errors and irregularities that may have a significant effect on the financial statements and to observe due diligence and professional care during consideration.

Answer 1

Methods

Accounts Affected

U/O

Assertions

Audit Procedures

Creating fictious inventory by adding false count sheets to the inventory count

Purchases Account

O

Misstatement of accounts and stock ammendment

To ensure that the purchases account and the stock management is not under the supervision of one person alone

Bringing sales for the first 10 days of the subsequent year forward

Sales Account

O

Changing of cash and cash equivalent and manipulating of profit

Ensuring that sales account is properly tally with the sales invoices in accordance with the date of sales.

Postponing recognition of supplier's invoices until the subesquent period

Purchases and Creditors Account

U and O respectively

Manipulation of accounts and missrepresentation of accounts

To automate the accounts with the purchases and sales invoices in a way that manual manipulation is impossible

Create false claims for credit on goods returned and volume discounts that had been supposedly afreed to by suppliers

Purchases Return, Creditors ...