Tuesday, June 4, 2013
Wednesday, November 14, 2012
International Financial Reporting Interpretations (IFRICs)
You can download IFRICs issued by IASB by clicking following links,
IFRIC 1 - Changes in existing decommissioning ,Restoration and similar liabilities
IFRIC 2 - Members' Shares in Co-operative Entities and Similar Instruments
IFRIC 1 - Changes in existing decommissioning ,Restoration and similar liabilities
IFRIC 2 - Members' Shares in Co-operative Entities and Similar Instruments
Sunday, November 11, 2012
International Accounting Standards
You Can download International Accounting Standards (IASs) Issued by IASB (PDF) from following links,
IAS 1 - Presentation of Financial Statements
IAS 2 - Inventories
IAS 7 - Statement of Cash Flows
IAS 8 - Accounting Policies,Changes in Accounting Estimates and Errors
IAS 10 - Events After the Reporting Period
IAS 11 - construction Contracts
IAS 12 - Income Taxes
IAS 16 - Property Plant & Equipments
IAS 17 - Leases
IAS 18 - Revenue
IAS 19 - Employee Benefits
IAS 20 - Accounting for Government Grants and Disclosure of Government Assistance
IAS 21 - the Effects of changes in Foreign Exchange Rates
IAS 23 - Borrowing Costs
IAS 24 - Related Party Disclosures
IAS 26 - Accounting & Reporting by Retirement Benefit Plans
IAS 27 - Consolidated & Seperate Financial Statements
IAS 28 - Investments in Associates & Joint Ventures
IAS 29 - Financial Reporting in Hyperinflationary Economies
IAS 32 - Financial Instruments - Presentation
IAS 33 - Earnings Per Share
IAS 34 - Interim Financial Reporting
IAS 36 - Impairment of Assets
IAS 37 - Provisions Contingents Liabilities and Contingents Assets
IAS 38 - Intangible Assets
IAS 39 - Financial Instruments - Recognition & Measurement
IAS 40 - Investment Properties
IAS 41 - Agriculture
IAS 1 - Presentation of Financial Statements
IAS 2 - Inventories
IAS 7 - Statement of Cash Flows
IAS 8 - Accounting Policies,Changes in Accounting Estimates and Errors
IAS 10 - Events After the Reporting Period
IAS 11 - construction Contracts
IAS 12 - Income Taxes
IAS 16 - Property Plant & Equipments
IAS 17 - Leases
IAS 18 - Revenue
IAS 19 - Employee Benefits
IAS 20 - Accounting for Government Grants and Disclosure of Government Assistance
IAS 21 - the Effects of changes in Foreign Exchange Rates
IAS 23 - Borrowing Costs
IAS 24 - Related Party Disclosures
IAS 26 - Accounting & Reporting by Retirement Benefit Plans
IAS 27 - Consolidated & Seperate Financial Statements
IAS 28 - Investments in Associates & Joint Ventures
IAS 29 - Financial Reporting in Hyperinflationary Economies
IAS 32 - Financial Instruments - Presentation
IAS 33 - Earnings Per Share
IAS 34 - Interim Financial Reporting
IAS 36 - Impairment of Assets
IAS 37 - Provisions Contingents Liabilities and Contingents Assets
IAS 38 - Intangible Assets
IAS 39 - Financial Instruments - Recognition & Measurement
IAS 40 - Investment Properties
IAS 41 - Agriculture
Friday, November 2, 2012
Auditing Cash & Bank Balances
Auditing Cash & Bank balance involves several audit procedures. In broad sense following procedures can be performed,
1. Analytical Procedures
2. Calling Confirmations
3. Reviewing Bank Reconciliations
4. Physical verification
5. Verify the Cash Valuation
6. Cut off testing
1. Analytical Procedures
Cash and/or bank balance can be compared with the previous year respective balance and if there are any material deviations from the previous financial period, management explanations needs to be obtained by the auditor for such variances.
2. Calling confirmations
Calling confirmation is one of most critical audit procedure in verifying cash & bank balances. In particular the auditor must ensure that the bank confirms all the bank balances and related off balance sheet items such as Letter of credit facilities etc.
Therefore the best way to do this is to sending and letter by the auditor himself to the bank with the approval of the management,requesting necessary information.
Further it should note that in the current practice some international banks (Ex. HSBC) outsourced the confirmation activities and therefore auditors can obtain confirmation through online process.
3. Reviewing Bank Reconciliations
Same as calling confirmation this is also a critical audit procedure whereby the auditor can obtain a reasonable assurance on the completeness assertion of the Bank balance.
In this audit procedure auditor obtains the bank reconciliation prepared by the management and check the accuracy of the reconciliation by considering the balances used for the reconciliation and the appropriateness of the reconciling items (Ex. represented cheques, Unrealized deposits)
4. Physical Verification
with regard to the cash in hand balances, specially petty cash balances surprise physical verification can be arranged so that the auditor can ascertain whether such book balance of cash in hand is physically exists.
5. Cash valuation
In a case where the cash and bank balances are maintained other than reporting currency, such balances needs to be converted to the reporting currency using appropriate exchange rates. Thus the auditor needs to check the accuracy of the conversion of such casn & bank balances in to reporting currency.
Ex.
The reporting currency of the company "A" is US $ while it holds bank balances in Euros. Thus such balances carried in Euro needs to be converted to the US $ in the financial statements using appropriate exchange rate.
6. Cut off testing
Cut off testing are used as both substantive procedure and Test of controls. by performing cut off test auditor can ensure that all the payments and receipts that should have recorded in the current financial period were recorded and all the payments and receipts that should have recorded in next financial period were recorded properly.
The auditor selects last 5 payments and receipts recorded in the current year bank book and check whether such transactions are recorded in the proper period. further he select first 5 payments and receipts recorded in the next financial period and ensure that those transactions are recorded in the proper period.
1. Analytical Procedures
2. Calling Confirmations
3. Reviewing Bank Reconciliations
4. Physical verification
5. Verify the Cash Valuation
6. Cut off testing
1. Analytical Procedures
Cash and/or bank balance can be compared with the previous year respective balance and if there are any material deviations from the previous financial period, management explanations needs to be obtained by the auditor for such variances.
2. Calling confirmations
Calling confirmation is one of most critical audit procedure in verifying cash & bank balances. In particular the auditor must ensure that the bank confirms all the bank balances and related off balance sheet items such as Letter of credit facilities etc.
Therefore the best way to do this is to sending and letter by the auditor himself to the bank with the approval of the management,requesting necessary information.
Further it should note that in the current practice some international banks (Ex. HSBC) outsourced the confirmation activities and therefore auditors can obtain confirmation through online process.
3. Reviewing Bank Reconciliations
Same as calling confirmation this is also a critical audit procedure whereby the auditor can obtain a reasonable assurance on the completeness assertion of the Bank balance.
In this audit procedure auditor obtains the bank reconciliation prepared by the management and check the accuracy of the reconciliation by considering the balances used for the reconciliation and the appropriateness of the reconciling items (Ex. represented cheques, Unrealized deposits)
4. Physical Verification
with regard to the cash in hand balances, specially petty cash balances surprise physical verification can be arranged so that the auditor can ascertain whether such book balance of cash in hand is physically exists.
5. Cash valuation
In a case where the cash and bank balances are maintained other than reporting currency, such balances needs to be converted to the reporting currency using appropriate exchange rates. Thus the auditor needs to check the accuracy of the conversion of such casn & bank balances in to reporting currency.
Ex.
The reporting currency of the company "A" is US $ while it holds bank balances in Euros. Thus such balances carried in Euro needs to be converted to the US $ in the financial statements using appropriate exchange rate.
6. Cut off testing
Cut off testing are used as both substantive procedure and Test of controls. by performing cut off test auditor can ensure that all the payments and receipts that should have recorded in the current financial period were recorded and all the payments and receipts that should have recorded in next financial period were recorded properly.
The auditor selects last 5 payments and receipts recorded in the current year bank book and check whether such transactions are recorded in the proper period. further he select first 5 payments and receipts recorded in the next financial period and ensure that those transactions are recorded in the proper period.
International Financial Reporting Standards (IFRSs)
You can download International Financial Reporting Standards (Pdf) from following links,
Framework for International Financial Reporting Standards
IFRS 1-First-time Adoption of International Financial Reporting Standards
IFRS 2- Share-based Payment
IFRS3 - Business Combinations
IFRS 4- Insurance Contracts
IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations
IFRS 6 - Exploration for and Evaluation of Mineral Resources
IFRS 7 - Financial Instruments: Disclosures
IFRS 8 - Operating Segments
IFRS 9 - Financial Instruments
IFRS 10 - Consolidated Financial Statements
IFRS 11 - Joint Arrangements
IFRS 12 - Disclosure of Interests in other Entities
IFRS 13 - Fair Value Measurement
IFRS 1-First-time Adoption of International Financial Reporting Standards
IFRS 2- Share-based Payment
IFRS3 - Business Combinations
IFRS 4- Insurance Contracts
IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations
IFRS 6 - Exploration for and Evaluation of Mineral Resources
IFRS 7 - Financial Instruments: Disclosures
IFRS 8 - Operating Segments
IFRS 9 - Financial Instruments
IFRS 10 - Consolidated Financial Statements
IFRS 11 - Joint Arrangements
IFRS 12 - Disclosure of Interests in other Entities
IFRS 13 - Fair Value Measurement
Sri Lanka Financial Reporting Standards
you can directly download LKASs and SLFRSs by using following link
SLFRS 1 First Time Adoption of Sri Lanka Financial Reporting Standards
SLFRS 2 - Share - Based Payments
SLFRS - 3 Business Combinations
SLFRS - 4 Insurance Contracts
SLFRS -5 Non Current Assets Held for Sale and discontinued operations
SLFRS -6 Exploration and evaluation of mineral resources
SLFRS - 7 - Financial Instruments - Disclosures
SLFRS 1 First Time Adoption of Sri Lanka Financial Reporting Standards
SLFRS 2 - Share - Based Payments
SLFRS - 3 Business Combinations
SLFRS - 4 Insurance Contracts
SLFRS -5 Non Current Assets Held for Sale and discontinued operations
SLFRS -6 Exploration and evaluation of mineral resources
SLFRS - 7 - Financial Instruments - Disclosures
Introduction
Being in the edge of the changing the Accounting Standards in Sri Lanka, practicing Accountants face numerous issues in their day today operations. Due to the lack of knowledge and expertise, Professional accountant face to a real challenge to overcome from those issues.
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