Is audit an attestation engagement or direct reporting engagement?
Audit engagement is an attest or attestation engagement rather than direct reporting engagement. As the purpose of audit engagement is to enhance the degree of users of financial statements which is achieved by the expression of opinion by the auditor. This opinion given by the auditor is merely about the fairness of the financial statements […]
What is meant by Assertions in audit or auditing?
Assertions or management assertions in audit or auditing simply means what management claims. For example, if a management states that internal controls are effective then it is a claim or assertion made by management. Similarly, it is primarily the responsibility of the management of the entity to prepare financial statements in which all the assets, […]
What is assurance engagement?
Assurance engagement is an engagement performed by a practitioner to enable himself to express an opinion about the measurement of subject matter against a criteria. Practitioner’s expression of opinion raise the confidence of the users over the measurement as to whether measurement of subject matter is a fair statement keeping the criteria applicable under consideration. Replacing the formal […]
What is an Assurance engagement in auditing?
Assurance engagement is an engagement performed by a practitioner to enable himself to express an opinion about the measurement of subject matter against a criteria. Practitioner’s expression of opinion raise the confidence of the users over the measurement of subject matter subject to the criteria applicable under consideration. To summarize the above formal definition, read through the […]
What is meant by Depreciation?
Depreciation simply means a steady decrease in the value of asset. Often it is studied in relation to the time period over which such decrease in the value has occurred. Therefore, often it is also defined as the value lost by the asset over its useful life i.e. the time period for which it was subjected […]
What is NIFO inventory valuation method?
NIFO - Next in, First out is an inventory valuation technique in which issues to the production hall are valued at the current market price i.e. current cost or replacement cost instead of the cost at which material was bought i.e. historical cost. This valuation method attempts to keep the production cost accurate according to […]
What are different inventory valuation methods?
There are numerous valuation techniques to value the inventory or stock. However, here is the short list of those which are known. To learn more about each method, click the name! Specific identification method FIFO - First in, First out method LIFO - Last in, First out method HIFO - Highest in, First out NIFO […]
What is the difference between Penetration pricing and Loss leader pricing strategy?
There are numerous pricing strategy that has been developed by creative brains at different companies but some are known more than others and are also taught at different levels to the students of accounting, business, marking and management. Two of them are penetration pricing strategy and loss leader pricing strategy. Although the apparent application looks […]
What are Real accounts and what is the related ledger and the accounting rule?
There are many different ways in which accounts can be classified and types of accounts be discussed. One of the ways is to divide all of the accounts in personal and impersonal accounts. Real accounts are basically a sub-classification of accounts under the type of accounts which are impersonal accounts. Such classifications are usually taught […]
What is the recognition criteria for subsequent expenditures incurred on non-current assets?
Subsequent expenditures refers to such costs which are incurred after the asset is recognized in the financial statement and brought to the location and condition intended. Examples of such expenditures include repair and maintenance, overhauling, upgradation, replacement costs etc. However, not all the subsequent costs can be capitalized in the carrying amount (carrying value or […]
