generally accepted accounting principles (GAAP) that are practiced by companies to create and release their annual finances. The financial statements allow the outside entities to judge the economic health of the company and from this decide if investments and larger lines of credit are wise. In the United States the Security and Exchange Commission enforce the GAAP although it is not actual law. The GAAP can be broken down into three sections which are assumptions, principles, and constraints. There
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Financial Position of Omega Health Foundation (OHF) The principles of finance and OHF’s financial position are very important to any leader of the organization and not just the financial officer or director. This evaluation of OHF finances will explain the financial position of OHF and offer recommendations to strengthen OHF’s financial position. Included in the evaluation will be an explanation of the principles of finance and how they relate to OHF, a comparison of net incomes and
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on the correct way to calculate deferred taxes, the correct way to report accounting changes and error corrections, and why a company would want to establish a subsidiary as a corporation. CPAs Professional Responsibilities According to the American Institute of CPAs (AICPA) CPAs not only have responsibilities to those who use their services but they must also cooperate with other CPAs to improve the accounting principles, maintain the public’s confidence, and carry out the responsibility of self-governance
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Deborah Asbury CPA Report Memo To: Outside CPAs From: Date: April 13, 2014 Re: CPA Report In response to the examination of the subsidiary that has been set up as a corporation, the explanations to the deferred tax methods, procedures for accounting changes and corrections, and the reasoning for setting up the corporation as a subsidiary will be addressed in the following memo. Deferred Tax Method Financial reporting and tax reporting create temporary differences between the amounts reported
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Accounting concepts are numerous in amount. They set the ground rules to follow in preparing accounts and financial statements. Financial statements provide knowledge of the financial health of companies. Learning about the different financial statements and their uses is important to understand how a company is competing in its market and if the company is successful. Through financial statements investors, creditors, and managers can analyze the health, risks, and profits. Two principles come
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To: Manager From: Hunter, CPA Re: Deferred Taxes, Accounting Errors and Changes, Subsidiary As of May 14, 2012, this memorandum will provide thorough explanations the following questions: the methodology used to determine deferred taxes, the procedures for reporting accounting changes and error corrections, and the rationale behind establishing the subsidiary as a corporation. We will also discuss the professional responsibilities of a CPA, and the difference between a review and an audit.
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Financial information is needed for decision making purpose. * Book keeping and Accounting will provide such information. * Meaning of Financial Accounting * Process of identifying, measuring, classifying, recording, summarizing and interpretation of the transactions of a business in terms of money to ascertain the result and financial position of business activities of particular period. * Accounting is the art of recording, classifying and summarizing, in a significant manner and
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From Sheet of Accounting Theory Difficulties in Segment Reporting * Base of Segmentation: in case of complex business, it’s difficult to select a base for organization as well as difficult to compare. * Allocation of Common Costs: Common costs are likely to be allocated, bringing segment information into question * Pricing Inter-segment Transaction: No specific method for inter-segment pricing, different method use for cost, cost plus market price and negotiable price. * Costs of
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building blocks for all accounting records and business transactions that occur. We cannot forget that decisions are based on the organizations fiscal objectives others are based on general accounting principles. So to better understand you must ask the question of “Is the financial management of the organization strong and how is the financial reporting records validity”? When we think of financial management we have to start with the basic framework of any accounting structure and that would
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examining a subsidiary that has been set up as a corporation. As part of their review, the CPAs have asked you to provide them with the following explanations: • The methodology used to determine deferred taxes • The procedures for reporting accounting changes and error corrections • The rationale behind establishing the subsidiary as a corporation Prepare your response to the three questions. Before submitting your response, your manager would like to know a little bit more about the request
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