Hasaan Fazal
What is meant by Cost?
Cost is the monetary amount of resources or the consideration for using the resource invested or consumed or used up. In its most simplistic form cost is monetary measurement of resource outflow due to any reason. As cost is an information, user of information may require this information to be generated or processed as per […]
What is Continuous stocktaking?
Stocktaking is simply physical checking or counting of inventory held by the entity and by continuous stocktaking it means inventory counts that are undertaken on regular basis. Continuous stocktaking method is used over periodic stock counts to increase accuracy especially for the goods which are high value or have high turnover i.e. fast moving inventory/goods and […]
Why auditors may fail to detect fraud?
Primary responsibility to prevent and detect fraud is upon management or those who are charged with an authority of management oversight (also known as those charged with governance). To achieve this objective it is their responsibility to have an effective internal control system in place which not detect fraudulent activities but also prevent them from […]
Auditor: “A watchdog not a bloodhound” Why yes? Why not?
This is still a question but why? In this article we asked other connecting questions so that if this cannot be answered directly then we might succeed making this puzzle if we answer all the other ones. This is a humble attempt to highlight an issue and no harm to any auditor or auditing as […]
What is Cash Conversion Cycle and how to interpret it?
Cash conversion cycle is one of the important tools in hands of users of financial statements including investors to measure liquidity performance of the business and ultimately it will also reflect how good the entity is being managed with its resources especially in short-term. Cash is life line of every kind of business. Without cash […]
What is Idle time and its accounting treatment?
Idle time is the simply the time for which labour has been paid for but no work has been done. Whereas inefficiency arises when labour is actually engaged on production but output is not as expected or simply not 100%. Idle time may arise out of normal or abnormal situations and it is the situation […]
What are limitations of External audit?
Limitations mean restrictions or factors that limit the effectiveness of audit engagement and limits the auditor to restrict only to provide reasonable assurance. Most of the time when we refer to limitations of external audit we mean inherent limitations of external audit engagement or in other words inherent limitations of assurance engagement. But it does […]
Can auditor provide absolute assurance if ideal situation is given?
We must be clear that auditor is neither expected nor required by the International Standards on Auditing to provide absolute assurance i.e. auditor is not expected even to put an effort to be able to provide absolute assurance. Auditor is unable to provide absolute assurance because of inherent limitations of audit therefore, auditor is at […]
Can we depreciate asset below residual value?
Main purpose of depreciation is to reduce the value of asset over its useful life in such a systematic way that such reduction corresponds with the rate at which benefits are rendered from the assets. To learn more about what is depreciation? You can visit this page. International Accounting Standard (ISA) 16 Property plant and […]
What is Business risk?
Doing day to day business involves carrying out numerous activities of different nature. It involves all kinds and sorts of business transactions. Some of these activities gets accounted for and some are simply dealt out of books. However, everything business do has inherent benefits and inherent problems. And it is the job and responsibility of […]