logo

(solved) Financial Systems and Auditing Assignment

   

Added on  2019-12-28

16 Pages4758 Words162 Views
FINANCIAL SYSTEMAND AUDITING

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3AC 1.1 Purposes and use of different accounting records..........................................................3AC 1.2 Accounting concept........................................................................................................4AC 1.3 Nature and structure of accounting system.....................................................................5TASK 2............................................................................................................................................6AC 2.1 Different component of business risk.............................................................................6AC 2.2 Control system in place at Minty Cola...........................................................................6AC 2.3 Risk of fraud within minty cola and suggestions as risk................................................7TASK 3............................................................................................................................................8AC 3.1 plan for audit for minty cola...........................................................................................8AC 3.2 Audit test procedure by Minty cola................................................................................9AC 3.3 Audit process................................................................................................................10TASK 4..........................................................................................................................................11AC 4.1 Qualified and unqualified audit Report........................................................................11AC 4.2 Draft a suitable management letters...............................................................................1CONCLUSION................................................................................................................................1REFERENCES................................................................................................................................3

INTRODUCTIONFinancial system is a systematic process where every rules and regulation has performedwith step by step manner. Further, It consists of some general accounting accept principles whichis necessary for maintained similarity in financial statement in effective manner. Everyaccounting policy has been prepared on the basis of international accounting standard which hasissued by IFRS. Therefore, this financial system helps in conducting proper audit withappropriate method and techniques (Claessens, Ghosh and Mihet, 2013). The auditor appliedaudit standard while they check the books of account therefore, investigation person fist plan andcheck every account with per-decided planning and method on the basis of sufficient evidence.Hence, they give their comment on report with proper manner and sign on it. In this reportcomprise, various financial system which are use while preparing books of account. Account hasbeen prepared on the basis of some assumption which is necessary to applied during preparingbooks of account. Plan of audit is also importance for checking fraudulent activities with inorganization.TASK 1AC 1.1 Purposes and use of different accounting recordsWhole accounting process has finished with step by step manner andevery transaction has record in different book of account as nature oftransaction.Bookkeeping – it is the systematic process of record every transaction on daily basis.Further, it is the primary stage of financial system because it record every day transactionon the basis of inventories generate or received. Therefore, it is the process which is thebeginning stage of every accounting process. Therefore, minty cola record prepared thisaccount for maintained every day transaction. Income statement – the income statement shows operational transaction which arisenduring accounting year. It has been prepared at the end of the year for shows operationaltransaction at the end of the year (Acharya and Ryan, 2016). Therefore, Minty colacompany prepare this account with follow general accounting accept principles in propermanner for known actual net profit at the end of the year.Balance sheet – It the main financial statement which shows the true and fair views ofaccount at the end of the accounting year. Minty is mandatory to prepare this statement

with proper manner as general accounting accept principles. It shows overall condition ofenterprise with effective manner. Cash flow statement – This statement has prepared for maintained cash flow in effectivemanner. It divided into three part operational activities, financial activities and investigateactivities (Khlif and Samaha, 2014). Therefore, the preparation for minty is mandatorybecause it's a big concern. It shows liquidity condition of the organization with propermanner that is why management can take proper action for long-term planning.Trading account – the trading account consist of direct transaction which relates to goodmanufacturing. Its main purpose is to segregate the direct expenditure and calculation ofgross profit in fair manner. The trading account consist only those transactions whichdirect link to product manufactures.AC 1.2 Accounting conceptThe whole process of accounting has depends on some concept which is assumed totreated as true with fair manner. A. Accrual concept – revenue and expenditure has recorded when it actually received in period.On the other word, every transaction which are not emerged actually than it will be not recorded(Cao, Chychyla and Stewart, 2015). For example: goods sales on approval basis not recorded inbooks of account until consumer not gives their confirmation about good. Therefore, duringfinancial period, every transaction relates to operation has recorded in book of account. B. Going concern concept – this concept has based on assumption where it is presumed thatentity business will remain for foreseeable period which will not be liquidate in any time infuture period. Further, it is ignored every factor which may emerged in future time therefore,business will continue for long-term period without face any barrier. C. Business entity – This concept state that business is different from its owner because it's aseparate judicial person which has own seal for entered in contract by using self name. Further,business maintained separate record of owner even its paid interest on investment amount. Onthe other hand, operation of business is not effected by changes of owner. D. Historical Cost – It is the value which record by organisation when it acquired assets.Therefore, it avoids to market value of assets (Gillespie and Hurley, 2013). Depreciationallocation has been made as value of acquired value.

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
The Importance and Meaning of the Fundamental Accounting Concepts
|16
|5498
|45

Minty Cola
|15
|5290
|293

Accounting System and Auditing Introductory Introduction
|14
|4942
|432

Financial System and Auditing Report - Minty Cola Co
|13
|4704
|80

Case Study Of Minty Cola Co- Effective Accounting System
|15
|5127
|340

(PDF) The importance of the financial audit
|14
|4080
|153