Small Business Accounting

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Practicing Due Diligence in Auditing

After you finish auditing all your client’s business and financial processes, you must perform due diligence before you issue your audit report. Due diligence [more…]

Assessing Events After the Balance Sheet Date

As an auditor, you must address all relevant events that take place after the balance sheet date but before you issue your report. For example, your audit client may be breathing a sigh of relief because [more…]

How to Sleuth for Subsequent Events

When performing due diligence in an audit, you have to address all relevant events that take place after the balance sheet date but before you issue your report. These are called subsequent events and [more…]

Identifying Subsequent Events That Require Disclosure

As you are performing due diligence in your audits, you take subsequent events into account. There are three Type II events that you should investigate to determine whether you need to disclose in the [more…]

Finding Material Changes to Debt or Equity

If your audit client has material debt or equity transactions after the balance sheet date, you must disclose the debt or equity in your audit report as well. This type of subsequent event may include [more…]

How to Find Contingent Liabilities

All auditors must know what a contingent liability is and how to handle it, but suppose your audit client doesn’t tell you it has contingent liabilities? What can you do to protect the good name of your [more…]

How to Assess Going-Concerns

You initially evaluate going-concern when deciding to accept a company as an audit client. You reevaluate the client’s ability to continue as a going-concern as you wrap up the audit. The term [more…]

What to Include in an Unqualified Audit Report

Auditors issue an unqualified report after they gather sufficient competent evidence and conduct the audit according to generally accepted auditing standards [more…]

How to Determine When an Unqualified Audit Report Isn’t Sufficient

Three circumstances may preclude you from issuing an unqualified report when you complete your audit. For example, if your client limits what actions you can take and what records you can look at, and [more…]

Types of Audit Reports You Can Issue Besides Unqualified

If for some reason, you can’t issue an unqualified report when you complete your audit, you still need to create a report. Three reporting options are available to auditors: the qualified report, the disclaimer [more…]

Issuing Reports When GAAP Aren’t Used

Some auditing clients don’t follow Generally Accepted Accounting Principles (GAAP). Some companies — usually smaller, private ones — may use a cash or tax basis instead. Companies that are highly regulated [more…]

Testing the Reliability of Documents

Part of an auditor’s job for a client can include verifying company documents. Attestation is a subset of assurance services that focuses on whether your engagement’s subject matter complies with the applicable [more…]

Conducting Compliance Audits

The purpose of compliance audits is to see how well a company is following applicable rules, policies, and regulations. For example, as an internal auditor your job may be to see how well various departments [more…]

Auditing Prepaid Expenses and Deferred Charges

As an auditor you have to pay attention to all of a company’s assets. Prepaid expenses and deferred charges appear on a company’s balance sheet as other assets [more…]

Examining Inherent Risks of Fixed Assets

At every step of an audit, you have to consider risks of misstatement and their associated controls. When you are auditing assets, be sure to focus is on identifying risks in the fixed-asset management [more…]

Assessing Fixed-Asset Control Risk

When auditing a company’s assets, don’t forget to take a look at asset control risk features the company has in place. During your audit you can perform tests of internal controls to limit the number of [more…]

Testing Transaction Assertions During an Audit

During your audit, you need to test management financial statement assertions for fixed and intangible asset transactions. The six assertions that you must attend to when auditing — occurrence, ownership [more…]

Responsibilities of an Accounting Department

Most people don’t realize the importance of the accounting department in keeping a business operating without hitches and delays. That’s probably because accountants oversee many of the back-office functions [more…]

Balance Sheet Basics and the Accounting Equation

One type of accounting report is a balance sheet, which is based on the accounting equation: Assets = Liabilities +Owners’ Equity. The balance sheet — also called a [more…]

Considering Careers in Accounting

Careers in accounting are diverse and can be lucrative. In our highly developed economy, many people work in accounting-related fields. In fact, nearly 2 million people make their living as bookkeepers [more…]

Bookkeeping and Its Basic Purpose

Bookkeeping, when done properly, gives you an excellent gauge of how well your business is doing. Bookkeeping also provides financial information throughout the year so you can test the success of your [more…]

Basic Bookkeeping Terms and Phrases

Get a firm understanding of key bookkeeping and accounting terms and phrases before you begin work as a bookkeeper. Bookkeepers use specific terms and phrases everyday as they track and record financial [more…]

Organizing Bookkeeping Records for Your Business

Staying organized is critical to efficient and accurate bookkeeping. Organize your bookkeeping records by deciding what to keep, and how to find information quickly when you need it. Everything you do [more…]

Using Bookkeeping Tools to Manage Daily Finances

After you set up your business’s books and put in place your internal controls, you’re ready to use the bookkeeping systems you established to manage the day-to-day operations of your business. You’ll [more…]

The Difference between Bookkeeping and Accounting

Every business and not-for-profit entity needs a reliable bookkeeping system based on established accounting principles. Keep in mind that accounting is a much broader term than [more…]

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