...Learning Zone Analytical Procedures – A Powerful Tool for Auditors (Relevant to Paper 8 – Principles of Auditing and Management Information Systems) David Chow FCCA, FCPA, CPA (Practising) Audit tests Auditors normally carry out the following types of audit tests to determine whether financial statements are fairly stated: (i) procedures to obtain an understanding of internal control (ii) tests of controls (iii) substantive tests: • substantive tests of transactions; • analytical procedures; and • tests of details of balances. assessment of risks of material misstatement at the assertion level includes an expectation that controls are operating effectively. This means that auditors perform tests of controls only when: (i) a system exists; and (ii) the system has controls. The performance of tests of controls is to establish whether those controls in the systems are actually functioning properly and effectively so that the auditors can determine whether or not they can rely upon the controls. Substantive tests Substantive tests (also known as substantive procedures) are procedures designed to test for dollar errors or irregularities directly affecting the correctness of financial statement balances. Auditors perform substantive tests in an audit to detect material misstatement at the assertion level. Substantive tests of transactions emphasize the verification of transactions recorded in the journals and then posted in the general...
Words: 1544 - Pages: 7
...the current position of the company, options available and best possible directions open for it, and how identified goals can be achieved. From this module we have learned that business analysis has a direct relation to identification of business strategy and plays a crucial role in it. Through this module we have learned how to use different analytical tools to assess a business and evaluate possible strategic directions for future. The primary role of the analyst is identification of tools from the huge available amount, applicable to exact company, situation and environment with further proper interpretation of data analysis results. As an instance, Williamson et al. (2004, p.64) citing Pascale (1996) provide the case when “Pascale’s analysis of Honda’s entry into US market gave a completely different interpretation of events than did the BCG working with rational planning/positional perspective”. Based on the knowledge obtained from this module I feel confident to advise my management on strategic issues. First big question according to Williamson et al. (2004, p.3) is “Where is the organization now?” and the best analytical tool, which answers this question is SWOT analysis, which assess internal strengths and weaknesses of the organization and external threats and opportunities, therefore it is the first...
Words: 462 - Pages: 2
...Financial Analysis Tools Nicola Maclin American Military University Managers should have the ability to assess performance of decisions they have made or intend to make, through structured and robust financial analysis. Managers need tools to forecast or predict as they struggle to make decisions on a daily basis to execute business strategy for the company. Financial analysis tools can drive projections and predictions in many areas of the business, from planning for production and distribution to decisions on a product or service. Managers can use these tools to both assess and improve business performance. Performance evaluation is an important component of managing a business. Managers need feedback to evaluate how well they have accomplished business strategy and managed key business process. Managers need to be able to link strategy with profitability. Financial analysis tools can help provide that much needed feedback. Financial data can be used to compute ratios analysis. These financial ratios gives managers the first look at the company’s vital signs and is used to assess a complete financial health and identify operational problems. Ratio analysis allows management to quickly and efficiently address concerns like: return on capital investment and the company’s profit margin. Ratio analysis can be an effective and useful management tool if ratios are calculated on items that are meaningful and where practical steps can be taken to make improvements in...
Words: 415 - Pages: 2
...SOME OF THE IFMIS APPLICATION SOFTWARE SOLUTIONS Introduction The original version of this document has been developed by a consultant firm (CJSC Avicomp Services, Russia) as an annex to the System Design report prepared during the design of Public Financial Management System (PFMS) in Moldova for the Ministry of Finance (MoF) in December 2005. The purpose of this study was to better understand the capabilities of some of the application software (ASW) modules (commercial-off-the-shelf software packages) in order to assess the level of customization needed to meet the MoF technical requirements while implementing an integrated Financial Management Information System (IFMIS) in Moldova. This study shows that all ASW solutions can provide the desired core Treasury (budget execution) functions with minimal customization. Additional PFM functions can be supported through custom developed software and be integrated with these software packages to provide the full PFMS functionality. In 2006, the MoF kindly agreed to share this annex with other public sector organizations and related specialists for their internal use while designing or studying the PFM systems. This document is intended to present the functional modules of several available ASW solutions which were implemented in similar projects in Europe and Central Asia (ECA) region of the World Bank. A summary of PFMS functions vs modules of selected ASW is presented below: • • • FreeBalance eFinancials Oracle E-Business Suite...
Words: 7208 - Pages: 29
...The Effects of Technology on the Accounting Accounting is one of the key elements in any organization, which financial health highly depends on its accuracy. Modern enterprise involves a huge number of financial transactions, which reflected through the relevant information flows. Accounting includes many routine operations, repetition of the same computing operations, as well as preparation of financial reports and payment documents. In this regard, the traditional accounting involves a complex and painstaking work of accountants, which requires considerable effort and knowledge. The modern development of information technologies and their wide application in economic practice can solve this problem by automating some of the accounting processes. Currently, the use of information systems in the enterprise became an integral part of the production process. Application of the system has allowed the company to automate operations on registration receipts, transfers and disposals of its assets, as well as to improve the overall degree of control, the availability, and conditions. In addition, automation of accounting has other advantages over the traditional way of accounting, such as ability to improve employees productivity, reduce the influence of the "human factor”, increase the speed of reporting and documentation, as well as to provide the possibility of parallel accounting in a several different standards. Implementation of information systems and technologies in...
Words: 751 - Pages: 4
...Cost Accounting, 14e (Horngren/Datar/Rajan) Chapter 19 Balanced Scorecard: Quality, Time, and the Theory of Constraints Objective 19.1 1) Quality management provides an important competitive edge because it: A) reduces costs B) increases customer satisfaction C) often results in substantial savings and higher revenues in the short run D) All of these answers are correct. Answer: D Diff: 1 Terms: quality Objective: 1 AACSB: Ethical reasoning 2) Quality of design measures how closely the characteristics of products or services match the needs and wants of customers. Conformance quality: A) measures the same things B) is the performance of a product or service according to design and product specifications C) is making the product according to design, engineering, and manufacturing specifications D) focuses on fitness of uses from a customer perspective Answer: B Diff: 1 Terms: design quality Objective: 1 AACSB: Ethical reasoning 3) Which of the following FAIL to satisfy conformance quality? A) machines that fail to meet the needs of customers B) machines that break down C) depositing a customer's check into the correct account D) All of these answers are correct. Answer: B Diff: 2 Terms: conformance quality Objective: 1 AACSB: Reflective thinking 4) Costs incurred in precluding the production of products that do NOT conform to specifications are: A) prevention costs B) appraisal costs C) internal failure costs D) external...
Words: 11093 - Pages: 45
...Topic Gateway Series Strategic Analysis Tools Strategic Analysis Tools Topic Gateway Series No. 34 Prepared by Jim Downey and Technical Information Service 1 October 2007 Topic Gateway Series Strategic Analysis Tools About Topic Gateways Topic Gateways are intended as a refresher or introduction to topics of interest to CIMA members. They include a basic definition, a brief overview and a fuller explanation of practical application. Finally they signpost some further resources for detailed understanding and research. Topic Gateways are available electronically to CIMA Members only in the CPD Centre on the CIMA website, along with a number of electronic resources. About the Technical Information Service CIMA supports its members and students with its Technical Information Service (TIS) for their work and CPD needs. Our information specialists and accounting specialists work closely together to identify or create authoritative resources to help members resolve their work related information needs. Additionally, our accounting specialists can help CIMA members and students with the interpretation of guidance on financial reporting, financial management and performance management, as defined in the CIMA Official Terminology 2005 edition. CIMA members and students should sign into My CIMA to access these services and resources. The Chartered Institute of Management Accountants 26 Chapter Street London SW1P 4NP United Kingdom T. +44 (0)20 7663 5441 F. +44...
Words: 3971 - Pages: 16
...Online Analytical Processing Online Analytical Processing In today’s markets the information plays a critical role in a sustainability of any business. Companies invest in technology that allows them to collect massive amounts of data: data marts and warehouses, database structures, specialized servers, and Web-enable software products (O'Brien & Marakas, 2011). The ability to analyze and synthesize the available data can be a source of a competitive advantage for any firm. Online Analytical Processing (OLAP) is one of tools that can assist managers in making sound business decisions. OLAP is a powerful technology behind many Business Intelligence (BI) applications. It offers many capabilities for data discovery, report viewing, complex analytical calculations, and planning (Olap.com, n.d.). In other words, OLAP is a “computer-enhanced multidimensional analysis” (Achor, 2002). The term OLAP was created by E.F. Codd in 1993. According to Codd and associates, OLAP is made up of many speculative “what-if” and/or “why” data model scenarios conducted within the context of the specific historical basis (Codd, Codd and Salley, 1993). Under these scenarios, the values of major parameters are changed to show potential variances in “supply, production, the economy, sales, marketplace, costs, and/or other environmental and internal factors” (Codd, Codd and Salley, 1993, p.6). These variable groups or dimensions make up a base for the company’s planning, analysis and reporting...
Words: 781 - Pages: 4
...Topic Gateway Series Strategic Analysis Tools Strategic Analysis Tools Topic Gateway Series No. 34 Prepared by Jim Downey and Technical Information Service 1 October 2007 Topic Gateway Series Strategic Analysis Tools About Topic Gateways Topic Gateways are intended as a refresher or introduction to topics of interest to CIMA members. They include a basic definition, a brief overview and a fuller explanation of practical application. Finally they signpost some further resources for detailed understanding and research. Topic Gateways are available electronically to CIMA Members only in the CPD Centre on the CIMA website, along with a number of electronic resources. About the Technical Information Service CIMA supports its members and students with its Technical Information Service (TIS) for their work and CPD needs. Our information specialists and accounting specialists work closely together to identify or create authoritative resources to help members resolve their work related information needs. Additionally, our accounting specialists can help CIMA members and students with the interpretation of guidance on financial reporting, financial management and performance management, as defined in the CIMA Official Terminology 2005 edition. CIMA members and students should sign into My CIMA to access these services and resources. The Chartered Institute of Management Accountants 26 Chapter Street London SW1P 4NP United Kingdom T. +44 (0)20 7663 5441 F. +44...
Words: 3934 - Pages: 16
...framework is to integrate the analytical and policy elements of financial stability and provide a framework of practical measures. It is suggested that a framework for financial stability will have 3 main objectives: To achieve early identification of potential risks and vulnerability of the system | To promote preventative and timely remedial policies to avoid financial instability | To resolve instabilities when the preventative and remedial policies fail. | The US approach tends to follow the traditional “shock transmission” approach that was the basis of many policy orientated frameworks. In this approach the system was considered to remain in a state of equilibrium if undisturbed or would adjust to a different state if and when a shock was experienced. This approach concord with the view that financial stability is not a defined static state but should be viewed as a continuum in which problems and imbalances may develop or be resolved through the self corrective mechanisms of the financial systems or the imbalances accumulate to the point that outside action would be required. The ultimate goal of the framework is to prevent problems from occurring or to resolve problems if prevention fails. However there are differences that emanate from differing cultural attitudes. In the US for example, there is more emphasis towards leaving corrections to the market and for the regulator to intervene when the market does not correct the problem. Financial stability two aspect microprudential...
Words: 738 - Pages: 3
... |7 | |30 July 2011 8:00 AM -11:00 AM and 1:00 PM – 3:00 PM |5 |30 July 2011 8:00 AM -12:00 AM and 1:00 PM – 5:00 PM |8 | | |30 hours | |30 hours | | | | | | Financial Management (GSFINMA) Course Description Financial Management is an introduction to the key principles and analytical tool of corporate...
Words: 1197 - Pages: 5
...Introduction With the recent increase in financial crimes and business fraud, forensic accountants are in great demand. Forensic accounting is the practice of utilizing accounting, investigative, organizational, analytical and communicational skills to conduct examination into a company’s financial statements in legal matters (Crumbley, 2007). Forensic accountants can own their own accounting firms or be employed by lawyers, insurance companies, banks, or large corporations. The use of accountants has played an important role in assisting the government as well as the public. Forensic Accountants participate in detecting scandals and financial crimes caused by individuals, companies and organized crime networks. This profession consists of three main areas litigation support, investigation and dispute resolution (Harris, 200). Litigation support involves the factual arrangement of financial issues, investigation comes in when criminal matters have occurred, and the dispute resolution is the process of bringing justice and fairness. To work effectively within these three core components, forensic accounts must have a set of skills to perform their job efficiently. Important Skills Forensic Accountants must posses more than the fundamental knowledge of financial accounting and auditing. Each project requires analysis, interpretation, summarization and presentation of complex financial- and business-related issues (Matson, 2012). There are several core skills that are...
Words: 2124 - Pages: 9
...from all your business processes. With analytics, you discern not only what your customers want but also how much they’re willing to pay and what keeps them loyal. You look beyond compensation costs to calculate your workforce’s exact contribution to your bottom line. And you don’t just track existing inventories; you also predict and prevent future inventory problems. Analytics competitors seize the lead in their fields. Capital One’s analytics initiative, for example, has spurred at least 20% growth in earnings per share every year since the company went public. Make analytics part of your overarching competitive strategy, and push it down to decision makers at every level. You’ll arm your employees with the best evidence and quantitative tools for making the best decisions—big and small, every day. The Idea in Practice To become an analytics competitor: Champion Analytics from the Top Acknowledge...
Words: 7321 - Pages: 30
...Phone : 27666340 E-mail : emmie.siu@polyu.edu.hk Consultation : Monday 2:30 pm to 6:30 pm Role and Purpose This subject aims to introduce an analytical framework for carrying out business analysis and valuation by using financial statements for valuing different kind of businesses. It contributes to the achievement of the BBA Programme Outcomes by enabling students to identify and resolve ethical issues contained in the financial statements (Outcome 4), apply basic accounting and financial theories to analyze financial reports and to identify potential problems and risks (Outcome 7). By the end of this subject, students will become a professional user of financial statements to advance further into the field of business valuation as investment analysis. It requires students to present and communicate effectively in English for general business communication (Outcome 1). Learning Outcomes Upon completion of the subject, students will be able to: a. Develop the ability to critically assess a firm’s financial condition through analyzing financial statements; b. Apply analytical tools to make forecasts and value firms and projects using different valuation techniques; in certain business context such as credit analysis and equity valuation. c. Evaluate and compare corporate valuation decision in specific contexts such as securities analysis...
Words: 1507 - Pages: 7
...The future of the accounting profession will be a period of increased change and continuous development. The industry will require new levels of business flexibility and competition will intensify because new industry entrants will outsource and automate accounting, audit, and tax professionals, especially for routine and lower-value services. Financial service companies, banks, software and Internet firms will soon offer an increasing amount of accounting and tax-related products and services. Outsourcing to lower-cost countries will also continue to grow in the future. India, for example, already attracts global accounting work and other countries are moving into this field. Seeing opportunity, the government has targeted accounting outsourcing as a growth industry. Globalization will require accounting professionals to master new skills, knowledge, and standards as a growing number of clients operate across borders. The U.S. Securities and Exchange Commission has issued a plan to require U.S. companies to issue financial statements to the International Financial Reporting Standards (IFRS) by 2015. This means that practitioners will be required to gain expertise in both the U.S. Generally Accepted Accounting Principles (GAAP) and IFRS reporting standards. In addition to the changes brought by IFRS, other legal requirements will continue to expand as governments at all levels increasingly require accounting professionals to help with agreements. Even accounting professionals...
Words: 713 - Pages: 3
