What are net purchases in accounting/business?
Definition Net purchases refer to total purchase after deducting discount obtained from supplier, goods returned to the supplier, and allowances made on the purchase. This … Read more
Definition Net purchases refer to total purchase after deducting discount obtained from supplier, goods returned to the supplier, and allowances made on the purchase. This … Read more
Definition The audit risk is that auditors might issue an inappropriate audit report. It’s a prime business risk for audit firms that might bring reputational … Read more
Audit report modification is when auditors need to change/modify their audit opinion. The audit report can only be changed/modified in line with the accounting standard. … Read more
The audit report is a document attached with the financial statement. In this report, external auditors state their opinion about the financial statement prepared by … Read more
Definition Directional testing is when auditors obtain sufficient and appropriate audit evidence from a specific direction. The directional testing can be either debit or credit … Read more
Definition Going concern assumption is used by businesses to prepare the financial statement. This assumption impacts the accounting treatment, valuation, and presentation of various account … Read more
Audit procedures in external audit play important role. Without performing these procedures, an auditor may not verify audit assertions and issue audit report. It’s advisable … Read more
Auditors need to understand the overall business environment and controls implemented by the audit client. This enables them to assess the overall risk of material … Read more
Business understanding is important for auditors in the following way, Auditors will be able to assess the risk of material misstatement more precisely. It helps … Read more
Definition Audit assertions are claims made by management that financial statements are accurate and do not contain any errors. Here, auditors’ work begins and they … Read more
Definition In an audit, know your client means an auditor needs to understand client business. The understanding needs to be obtained from different perspectives including … Read more
Definition Auditors perform audit procedures to obtain sufficient and appropriate audit evidence on the identified risks. Generally, auditors understand business, assess the risk of material … Read more
Definition Audit scoping refers to the process of setting extent, nature, and timing of audit procedures to be performed. The scope of auditing is dependent … Read more
The term Quality control review is widely used in the world of accounting and auditing. It aims to enhance the accuracy of implemented controls in … Read more
People often put off their business idea because bookkeeping and accounting scare them. We understand it can be tough and technical to do tax and … Read more
Definition Cut off testing refers to determining if accounting entries are recorded in the correct accounting periods. The purpose of this exercise is to determine … Read more
Definition Target costing is a systematic way to set product price. It considers the current market price and desired profit to set production cost. It … Read more
Substance over form principle states that transaction should be recorded based on realism (substance). If there is a conflict between realism and form (legal aspects), … Read more
Definition The auditor performs analytical review procedures during audit execution. As the name suggests, it’s analytical. It means numbers are compared with other numbers by … Read more
An operational audit is conducted to evaluate the performance of a company’s operations. It includes both day-to-day activities and broader-scale activities. This type of audit … Read more