Auditing & Accounting experts foreseen that impairment testing on intangible assets, fixed assets, investments, assets, etc has to be assessed crtically in a detailed basis in the coming year, subsequent to the credit crunch.
The recession has driven the stock prices down, the value of the intangible assets sank accordingly. The recession acts as a trigerring points for the impairment testing.
Hence, the auditors should highlight to the clients that the impairment testings have to be performed earlier ( rather than sometimes near the audit), as the impairment testings required a lot of times. Rigid assessment by auditors are required, given the fact that financial statements users will be using the financial statements more cautiously.
Work life balance in Big 4
Let's define what's big 4?
Big 4 was defined as 4 largest accounting firms in the accounting profession worldwide. The Big 4 consist of the following entities: Pricewaterhouse Coopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG.
Auditors in Big 4, in general, have long working hours. Working till midnight and over the weekend is a norm in the industry. We've heard about the heavy work load, stressful life and long working hours of auditors who work in Big 4 audit firms. However, what are the factors cause the long working hours in Big 4?
It is due to the portfolio of the clients that Big 4 have. Majority of the listed companies would engage one of the Big 4 audit firms as their auditors. Having high volume of transactions and relatively more complicated business, listed company has tigther dateline to meet. As such, the audit team work on a listed company have to struggling between the dateline and the complexity of the transactions. This has resulted in the increase in hours required to spend.
Listed parent company would normally requires its oversea subsidiary to engage the same auditor as the parent company or at least a big 4 auditor. The Multinational Company located in oversea has tight reporting dateline too. Due to the fact that the parent might be a listed company in United States/ Europe, and subsidiary is required to report to the parent company on time, in order to meet the regulatory dateline.
The above analysis tell you why auditors in Big 4 needs to work so late.
Big 4 was defined as 4 largest accounting firms in the accounting profession worldwide. The Big 4 consist of the following entities: Pricewaterhouse Coopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG.
Auditors in Big 4, in general, have long working hours. Working till midnight and over the weekend is a norm in the industry. We've heard about the heavy work load, stressful life and long working hours of auditors who work in Big 4 audit firms. However, what are the factors cause the long working hours in Big 4?
It is due to the portfolio of the clients that Big 4 have. Majority of the listed companies would engage one of the Big 4 audit firms as their auditors. Having high volume of transactions and relatively more complicated business, listed company has tigther dateline to meet. As such, the audit team work on a listed company have to struggling between the dateline and the complexity of the transactions. This has resulted in the increase in hours required to spend.
Listed parent company would normally requires its oversea subsidiary to engage the same auditor as the parent company or at least a big 4 auditor. The Multinational Company located in oversea has tight reporting dateline too. Due to the fact that the parent might be a listed company in United States/ Europe, and subsidiary is required to report to the parent company on time, in order to meet the regulatory dateline.
The above analysis tell you why auditors in Big 4 needs to work so late.
Accounting Degree Benefits for Businesses and Firms
Now that you've finished your studies you are looking for accounting degree employment. Theoretically, you should not have too much trouble in this search. There are many unorganized businesses out there which could use a professional accountant. A certified public accountant does just that: keeps track of financial transactions and records in the business.
The majority of business owners ask themselves if they should hire an accountant or not. Having an unorganized business is not an option, because that would lead to bankruptcy. Of course there is also the possibility to use an accounting software, but not anyone can use that either. The best thing to do is to look for a person with an accounting degree.
The first obvious choice for a business owner would be to look for a professional in an accounting firm. This has the advantage that you can find accountants who are well trained and experienced. This is not mandatory though, and you can as well hire an accountant who works on his own. This should be your own decision based on what type of accounting job you need.
How can one become certified public accountant? In America, you need to meet a few requirements, as in most of the countries worldwide. Usually, you need about 150 accounting college hours. You will also have to pass an exam. But this is only if you want to become a certified public accountant.
If you, however, are at the other end of the deal, meaning a business owner, you have more than one option when hiring an accountant. You can do it as a long term arrangement, or, as some business owners do, with the only purpose of him paying the taxes. But why hire a professional accountant with the sole purpose of paying taxes?
The answer is simple. Accountants are the ones who know best how to increase business deductions and maximize profit. You could be familiar yourself with some of these procedures but accountants are those who know them all. In the end, it's your choice whether you permanently want to hire an accountant, hire one for short periods of time, or even learn accounting yourself.
If you decide that you want to hire an accountant make sure you check his qualifications. You can work with a local accountant or look for one in an accounting firm.
Whatever you decide, you have to make sure that the respective person has an accounting degree. And hiring a professional to keep your financial situations in order is a very wise thing to do. You need to have the correct tax returns if you want not to get in trouble with the law. After all, there are many professionals out there who are looking for accounting degree employment.
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Author: benjamin
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How You Know an Accounting Career is for You
Choosing an accounting career is a great life move. Unlike many other industries, there is never a shortage of work in this industry. In fact, there can never be too many accountants in the world because every single corporation requires at least one, but often several and in particular, those with expertise in particular aspects of accounting. If you can improve your accounting skills over time then you will be richly rewarded for them. ![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_s6N3gM_NPrjs5SdI9LTQmd-IKPYaPkTPwDSJ47HVOppNARDM8J3Bx98xWQ9olcWJygoNpF1oA-ehiSeSj9fW6BtAPBpKInxdqriehCWrE5M3MDKXfVEEjZq7mJU1xqYzSnGA26rFyMiM2WZmwRskpL=s0-d)
Some of the benefits of being an accountant include:
- Constant work and little chance of losing your job - Plenty of opportunity for career advancement and pay rises - Many areas of expertise to choose from - Ongoing study options - Great salary - Ability to understand finance in detail which can benefit your own personal finances - Option to become self employed
Self Employed Accountant vs Employed Accountant
Accountants are fortunate in that they can either choose to work for themselves or work for someone else. In general, a self employed accountant will deal mainly with personal income tax and possibly corporate tax. They can also become auditors and other roles. In general, self employed accountants are limited in the work they can do unless they have extensive experience in a corporate environment before undertaking self employment.
The employed accountant on the other hand has many options and a great capacity to gain more skills and experience. It is not uncommon for accountants to be both employed and self employed at the same time, meaning income is increased. They key is to be able to balance the work load of both roles.
All accountants must become certified by undertaking an accounting degree at a university or college. Here you will learn all the skills required to be good at your job as well as life skills like communication and attention to detail. You can choose to focus on one aspect of accounting after you have been studying for some time. This could be tax accounting, auditing, corporate accounts, payroll and many more fields.
Anyone can become an accountant but it helps to have an interest in finance and numbers. Analytical skills are vital as is a high attention to detail, as mistakes in accounting can often cause major problems for companies. You can choose to work in the public or private sector, with there being benefits in both. Does a career in accounting sound interesting to you? Learn everything from the types of accounting careers to where to get accounting career training. It?s all available at http://www.careertoolkits.com/
#64 Introduction to Auditing
What is auditing? More specifically, what is financial auditing?
In big corporate entities ( Multinational- Companies, listed companies), small-to-meidum businesses, sole proprietor,etc, the entities are, required by law, to keep accounting records of the business on a timely basis. Hence, the entities hire accountants to keep the accounting records, that reflect the day-to-day business acitivities of the Company, as well as financial position of the Company.
The financial results are summarized and presented in what we called: Statutory Account ( Financial Statements/ Annual report for listed Company). How do we ensure that the financial results presented are accurate?
The auditors, independent party, are engaged to audit the financial results prepared by the entities. The auditors provide an independent check on the accounting policies, method of estimation, mathematical accuracy on the financial results presented.
The tasks are not as easy as other people would thought, as auditing involve a lot of professional judgement to ensure that the accounting policies adopted are not materially deviated from the local financial reporting standard.
In short, auditing provide and independent check on the financial results, and publish an opinion on the financial results of the entity: to give opinion on if the financial results are fairly stated.
In big corporate entities ( Multinational- Companies, listed companies), small-to-meidum businesses, sole proprietor,etc, the entities are, required by law, to keep accounting records of the business on a timely basis. Hence, the entities hire accountants to keep the accounting records, that reflect the day-to-day business acitivities of the Company, as well as financial position of the Company.
The financial results are summarized and presented in what we called: Statutory Account ( Financial Statements/ Annual report for listed Company). How do we ensure that the financial results presented are accurate?
The auditors, independent party, are engaged to audit the financial results prepared by the entities. The auditors provide an independent check on the accounting policies, method of estimation, mathematical accuracy on the financial results presented.
The tasks are not as easy as other people would thought, as auditing involve a lot of professional judgement to ensure that the accounting policies adopted are not materially deviated from the local financial reporting standard.
In short, auditing provide and independent check on the financial results, and publish an opinion on the financial results of the entity: to give opinion on if the financial results are fairly stated.
#63 Impact of client's Key Performance Indicator on audit
During current credit crunch climate, auditors must be aware and gain an understanding of the management's Key Performance Indicator, as it represents the risky areas, where the management is likely to manipulate the results in order to meet the Key Performance Indicator.
Meeting a Key Performance Indicator means that the management might receive higher remunerations / incentive, and the jobs are highly secured with low risk of being retrenched.
Meeting a Key Performance Indicator means that the management might receive higher remunerations / incentive, and the jobs are highly secured with low risk of being retrenched.
#62 Deliveries without Billings
In construction industry and service industry (that involved installation service), there are instances that goods are delivered to customer, while billings have not been done. Can the Company, who delivered the goods, recognize revenue upon deliveries of the goods? Can the Company recognize revenue even if the installation services have not been done?
It depends on the term of the contract. In industry norm, the deliveries of goods to client’s location do not constitute a probable ground to recognize revenue.
Then, how should we record the goods delivered to client’s location?
The answer is: the items delivered are stocks in nature. As such, it should be recorded as part of the inventory recorded in the Company’s balance sheet.
#61- Stock Take Procedure 4
Proper segregation of duties must exist during stocktake.
As an auditor, we need to observe that the stock take team consist of:
1) Counter (Warehouse personnel)
2) Checker (Staffs from department other than warehouse department)
Warehouse personnels are the people who has direct access to the Company's stocks. Why should the warehouse personnel (counter) accompanied with a checker during stock take? This is to prevent potential fraud case and observe the normal inventory management procedures of the client. Warehouse personnel are the people who has day-to-day access to the warehouse. Assuming, they steal one and reported one stock lesser during stock take, nobody will not realize the fraud case, unless the inventory system capture the daily movement.
To illustrate with an example. Company XYZ does not has proper inventory system that keep track on goods in and goods issued. The Company will not know the exact quantity of the inventory item, until the physical stock take, which is done on a monthly basis. The employee could have just steal one item and without letting people realize.
Hence, stock take team must consist of at least one people from other department to check that the quantity counted and reported is as what have been counted physically.
As an auditor, we need to observe that the stock take team consist of:
1) Counter (Warehouse personnel)
2) Checker (Staffs from department other than warehouse department)
Warehouse personnels are the people who has direct access to the Company's stocks. Why should the warehouse personnel (counter) accompanied with a checker during stock take? This is to prevent potential fraud case and observe the normal inventory management procedures of the client. Warehouse personnel are the people who has day-to-day access to the warehouse. Assuming, they steal one and reported one stock lesser during stock take, nobody will not realize the fraud case, unless the inventory system capture the daily movement.
To illustrate with an example. Company XYZ does not has proper inventory system that keep track on goods in and goods issued. The Company will not know the exact quantity of the inventory item, until the physical stock take, which is done on a monthly basis. The employee could have just steal one item and without letting people realize.
Hence, stock take team must consist of at least one people from other department to check that the quantity counted and reported is as what have been counted physically.
Accounting as a Career - The Skills You Need in Order to Pursue Accounting as a Career
Are you good with numbers, have a keen interest in business management, meticulous, analytical and organized? Then, you might be one of the possible candidates pursuing accounting as a career in your near future. However, simply being good with numbers is not exactly the only requirement to succeed as an accountant.
So what are the other skills you need in order to pursue accounting as a career?
One of the common responses that most employers will look out for candidates applying for accounting as a career will be 'having a strong motivation and the right attitude for the job'.
Besides that, someone who is keen on taking on accounting as a career also need to take into consideration that interpersonal and team working skills are vital on the job. Both oral and written and communication skills are also rated as very important.
You will also need to show that you are able to learn new skills and be an analytical problem solver. The role of an accountant today has far progressed beyond the traditional and stereotypical image of accountants as 'bean-counters'. As such, pursuing accounting as a career will also mean that you have to update yourself in the technology surrounding the business management world.
Although having a high mathematical ability is a plus, however it is not critical that you are highly proficient in mathematical concepts such as trigonometry, calculus and such. It is fairly important to note that you have to be comfortable working with numbers if you decide to pursue accounting as a career.
Accounting as a career can prove to be one of the better career choices for youths to be adaptable to the volatile nature of business management. With a solid accounting background, you will encounter more opportunities to move your career forward in different directions.
Don't let yourself be stuck with a JOB that you hate! Find out how thousands of others like you have benefited from our amazing report on How to Prepare and Plan Your Career Change in Just 7 Days. Click here http://FindYourDreamCareer.info for our FREE Step-by-Step Checklist to better manage your career change now!
You can also find out more resourceful information and the latest news on Accounting as a Career by visiting our Career Guide website.
Article Source: http://EzineArticles.com/?expert=Ray_Baron
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Tips To Start Your Accounting Career
What are the best ways for you to get your accounting career started? When I started my career, I know I was a little intimidated by the process. However, once you know what you are doing and how to go about lining everything up, you can actually you're your accounting career up and running in no time.
The first step to getting your accounting career up and running is to make sure you have the proper education. In order to have an accounting career you will want to make sure you have some sort of accounting education. Check on line and you may be able to find a school or program that can help you with getting your degree. If, though, you already have your accounting degree, you are one step closer to getting your accounting career off the ground.
Once you have your education completed, the next step in getting an accounting career going is to figure out what you want to do, exactly. For instance, you can choose a corporate accounting career, you can work for individuals, or you could even work for a non-profit organization of some kind. In other words, before you get your accounting rolling you will need to figure out what exactly your accounting career is going to be.
Once you figure out what type of accounting career you want to get started, you can begin your search for a job. There are three good places to look for jobs that can get your accounting career off the ground: the internet, newspaper, and through a headhunter. Check online job sites to see what types of accounting jobs are available in your area. Finding an entry-level job can be just the boost you need to get your accounting career going.
Another way to find that local job is through one of the local newspapers. Check the classifieds in the paper under accounting. There you can find accounting career entry level jobs that may help you. You can also contact a headhunter in the area. A headhunter specializes in placing people in jobs for their clients. If you have the education required to get into an accounting career, a headhunter may be able to place you with one of his or her clients.
Getting any career off the ground is a little bit of a challenge for most anyone. You want to get your accounting career going, and that is something that can be done as long as you know how to go about it. First, make sure you have the education required of someone with an accounting career. Next, figure out exactly what type of accounting career you would like to have, whether it be corporate, private, or non-profit. Finally, it is time for you to get a job and get your accounting career rolling. If you want to build a career, get yourself started by following these simple tips and you will be going before you know it.
If you would like to view more of my articles on accounting jobs, please feel free to visit my accounting careers website!
Article Source: http://EzineArticles.com/?expert=Christopher_Luck
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#60 Implication of Internal Control- Impact of Credit Crunch on New Customers
In the current environment, where credit crunch impacts are prevailing, there are increasing credit risks of the Company. With the eagerness to obtain new customers, the strict credit risk assessments ( of new customers) should not be compromised.
The entity ( that are directly and severely affected by the credit crunch) should evaluate creditworthiness of new customers cautiously. Complete information needed to be obtained, for instance:
- Financial results of the Company
- Inquiries with market peers/ industrial person
- Shareholders' fund of the Company
- Reasons for purchasing from the entity
The entity can discuss with the new customer on the reason to purchase from them, as the supplies customer might have been discontinued from other supplies, due to credit risk concern.
Hence, a complete understanding and proper approval process need to be undertaken to prevent doubtful debt issue.
The entity ( that are directly and severely affected by the credit crunch) should evaluate creditworthiness of new customers cautiously. Complete information needed to be obtained, for instance:
- Financial results of the Company
- Inquiries with market peers/ industrial person
- Shareholders' fund of the Company
- Reasons for purchasing from the entity
The entity can discuss with the new customer on the reason to purchase from them, as the supplies customer might have been discontinued from other supplies, due to credit risk concern.
Hence, a complete understanding and proper approval process need to be undertaken to prevent doubtful debt issue.
#59 Accounting treatment for bad debt provision
What would be the accounting entries while the collectibility receivable from a customer is deemed to be in doubt:
Dr. Bad Debt Expense (P/L)
Cr. Provision for Doubtful Debt (B/S)
Being provision for doubtful debt on receivable from XYZ
Provision for doubtful debt (B/S) relates to a contra account to Account Receivable. As such, the provision amount will be off-set against Account Receivable. Whereas, bad debt expense is generally classified as administrative expense in Profit & Loss statement.
Dr. Bad Debt Expense (P/L)
Cr. Provision for Doubtful Debt (B/S)
Being provision for doubtful debt on receivable from XYZ
Provision for doubtful debt (B/S) relates to a contra account to Account Receivable. As such, the provision amount will be off-set against Account Receivable. Whereas, bad debt expense is generally classified as administrative expense in Profit & Loss statement.
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