In 1992, Kaplan and Norton first published a paper about the Balanced Scorecard(BSC). It was a huge success and BSC soon became very popular all over the world. Before BSC emerged, organizations usually use traditional methods of performance evaluation focused mainly on financial measures such as ROCE, sales and profits. BSC translates an organization's mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and managem...
Independence is fundamentally an attitude of mind for exercise of professional judgment and defined as an abstract concept that is easily subject to misinterpretation. Quality of integrity, objectivity, honesty, and impartiality are included in the concept to characterize independence. Independence is also a basic element to the reliability of auditor's reports. However, it does not mean that an auditor must be free of all economic, financial, and other relationships to comply with independen...
The paid amount for employees for their services. This transaction goes into the income statement report and it comes from the Human Resources Department. Operating Expense. It is the total amount that is spent to run a firm in a specific period of time. This transaction goes into the income statement report and it comes from the Operational Department. Equipments Are assets that the business will use in several years to produce their products. This transaction could be in the income statemen...
Financial accountants and independent auditors commonly face challenging technical and ethical dilemmas while carrying out their professional responsibilities. This case profiles an accounting and financial reporting fraud orchestrated by the chief financial officer (CFO) of a major public company and his subordinates. The CFO, who was a CPA, took extreme measures to conceal the fraud from his company's audit committee and independent auditors. Despite those measures, the independent auditors...
Now a day's financial manager play a vital role in solving difficult problems in management. Present views in financial management deal a new meaning in decision making policy in the management. Presenting usefull data is the chief purpose of accounting, which is useful for the person within the organization i.e.; owners, management, employees and also outside the organization i.e.; investors, creditors, government, consumers, etc. Financial accounting is concerned with record keeping directe...
Analysing the Audit Documentation from the PCAOB The Sarbanes-Oxley Act of 2002 created the Public Company Accounting Oversight Board (PCAOB), which became responsible for managing and regulating the public accounting profession of auditing. The PCAOB created a set of standards for preparing an audit report this paper will focus on Auditing Standard No.3-Audit Documentation. Standard number 3 requires that publicly traded companies that are registered with the Securities and Exchange Commissi...
The degree to which a company or an investor utilizes the borrowed money is known as leverage. Leverage is a very commonly used term in all fields in the world. Relating it to physics, leverage denotes the use of a lever and a small amount of force to lift a heavy object. Similarly, in Business leverage refers to the use of a relatively small investment or a small amount of debt to achieve greater profits. That is, leverage is the use of assets and liabilities to boost profits while balancing...
As the financial crisis bites on, financial institutions appear to be worst-hit. A large number of them around the world have either been taken over or merged with another financial institution; nationalized by a government or central bank; or declared insolvent. Many banks in the US have been bankrupt, filed for bankruptcy or closed and received by the Federal Deposit Insurance Corporation, FDIC. The financial crisis 2008Â observed the collapse of American giant financial institutions which ...
An intangible asset is an identifiable non-monetary asset without physical substance. Recognition and measurement The recognition of an item as an intangible asset requires an entity to demonstrate that the item meets: the definition of an intangible asset; and the recognition criteria. This requirement applies to costs incurred initially to acquire or internally generate an intangible asset and those incurred subsequently to add to, replace part of, or service it. An asset meets the identify...
Activity-based management has brought about radical change in cost management systems. ABM has grown largely out of the work of the Texas-based Consortium for Advanced Manufacturing-International (CAM-I). No longer is ABM's applicability limited to manufacturing organizations. The principles and philosophies of activity-based thinking apply equally to service companies, government agencies and process industries (CIMA, 2001). The acronym itself has evolved from ABC to ABCM (activity- based co...