What is ABC Analysis?
ABC analysis is one of the known inventory classification methods available in which inventory is categorized in three classes A, B and C where A being most important, B being important and C being less important. ABC analysis is also known as Pareto Analysis, Pareto rule or 80/20 rule. ABC analysis must not be confused with […]
Exemptions in ACCA for ICAP Students
ICAP and ACCA being the two most prestigious accounting bodies share similar traits and therefore ACCA allows exemptions/relaxation in its examination scheme to ICAP students/affiliates/members. Following read will help you determine your exemptions. Exemptions available to ICAP students/affiliates/members are determined in two steps: Step 1: Determine the year of study. ACCA has classified the years […]
Exemptions in ICAP for ACCA Students
According to latest directive (issued in December 2010) ACCA qualified candidates can claim exemptions in the following subjects only if the relevant conditions are met: Modules Subjects/Tests Additional Conditions Pre-Entry Proficiency Test - A Functional English - A Quantitative Methods - B Introduction to Financial Accounting - C Financial Accounting - C Taxation Exemption will […]
What is the difference between Emphasis of Matter paragraph and Other Matter paragraph?
Auditor is required to express his opinion in the form of a written report called auditor’s report. Although auditor’s responsibility and also the purpose of auditor’s report is to convey primarily the auditor’s opinion on financial statements but if auditor believes that there is a matter that must be brought to attention of user of […]
How to account for Temporary Investment Incomes on funds from Specific borrowing?
It is a usual practice that if entity has borrowed funds to finance a qualifying asset then they might be invested temporarily until the funds are needed. This gives rise to a question if these temporary investments are to be deducted from borrowing costs eligible for capitalization or taken to profit and loss account as […]
What is meant by Carriage inwards and its accounting treatment?
Carriage inwards, transportation inwards, transport inwards, freight inwards or shipping cost are the cost borne by the buyer of the goods for moving the goods from supplier’s place to his own place (usually raw material store) or for receiving the goods at his place as such costs are to paid once delivered. It is often […]
Why auditor may be unable to obtain sufficient appropriate audit evidence?
Auditor is required to obtain sufficient appropriate audit evidence as it helps auditor reduce audit risk to appropriate level which leads to positive expression of auditor’s opinion in auditor’s report. Although auditor puts every effort in obtaining sufficient appropriate audit evidence, however, this is not always the case and under specific circumstances he may not […]
When Auditor expresses a Qualified opinion?
A qualified opinion is one of the three types of modified opinion that auditor expresses in circumstances where unmodified opinion is not appropriate in auditor’s judgment. Qualified opinion is also known as “except for” opinion. As the name suggests it is a conditional opinion on the financial statements being audited and implies that except for […]
What is Audit around the computer?
Audit around the computer means that processing done by the computer system needs not to be audited as auditor expects that sufficient appropriate audit evidence can be obtained by reconciling inputs with outputs. In simple words evidence is drawn and conclusions are reached without considering how inputs are being processed to provide outputs. Sometimes it […]
What is meant by CAATs?
CAATs short for Computer Assisted Auditing Techniques simply means that assistance of computers is taken by the auditor while carrying out audit engagement. Some students misinterpret the term as if computers will carry out audit engagement as a virtual assistant to the auditor which is not the case as yet. Explanation As we have witnessed […]