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financial audit (Unit 3. Cash Flow (Comparative Method
When comparing the…
financial audit
Unit 3. Cash Flow
Comparative Method
When comparing the general balances of 2 periods with different dates we can observe the changes obtained in the Assets, Liabilities and Equity of an Entity in terms of money.
Evaluations
They must contain a record of the evaluation of the audit evidence and the conclusions reached.
State of Origins
With regard to the name of State of Origin and Application of Resources, the US Financial Accounting Principles Commission: (FASB) initially called it, in that the technique of its preparation consisted only of comparing the initial and final balances
Results report
The most common type of auditor's report is the standard report, also known as an unqualified opinion or a clean opinion.
Unit 2. Income Statement
Sales cost
Distribution or sale: are those incurred in the area that takes the product from the company to the last consumer.
Expenses
Expenses are those reasonable expenditures, which the company must incur, in order to generate sales and / or income.
Net sales
This concept includes the total amount of sales, made by the company during the reference year, of finished products (those goods manufactured by the company itself in its production process, or by third parties, via subcontracted production, and that are intended for final consumption or its use by other companies).
Vertical and Horizontal Analysis
Vertical Analysis
In this type of analysis all the figures of a financial statement are expressed as a percentage of a figure of these.
Horizontal Analysis
This type of analysis aims to analyze the behavior over time of the financial statement items.
Unit 1. Balance Sheet
Liability Accounts
The set of financial representations of the obligations contracted by the entity, which has committed, as a result of these commitments, to transfer economic resources to other entities in the future is called a liability.
Asset Accounts
The group of financial representations of economic resources, capital goods and securities, tangible and intangible, owned by the Organization at a given date is called an asset.
Capital Accounts
The Assets must respond to the Liabilities, leaving the difference free, that is, what constitutes the Capital of the company.
Financial reasons
One of the most used instruments to perform financial analysis of entities is the use of Financial Reasons, since these can measure to a high degree the efficiency and behavior of the company.
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