What Is An Adverse Opinion, And How It’s Different From A Disclaimer of Opinion? An adverse opinion is a formal statement by an independent auditor that a company’s financial statements are not in accordance with generally accepted accounting principles (GAAP). This opinion is provided after the accountant has completed an audit of the company’s financial … Read more
Corporate Governance Corporate governance provides the framework by which companies can ensure that all stakeholders are taken care of and that decisions are made with the best interests of all parties in mind. It identifies who has power, accountability, and decision-making authority in the company. Corporate governance is a tool for management and the board … Read more
What Is A Corporation? A corporation is a business entity, legally recognized as a person, that is granted certain rights and responsibilities under the law. It is established by an individual or a group and is protected by limited liability, meaning shareholders are not personally responsible for the company’s debts. This structure allows corporations to … Read more
Qualities of Audit Evidence Audit evidence is used to verify the accuracy and compliance of a company’s financial statements and provide assurance to stakeholders. It is important for audit evidence to be sufficient, reliable, from an appropriate source, and relevant to the audit. Examples of audit evidence used by auditors include: Bank accounts Management accounts … Read more
What Are Fictitious Liabilities? Fictitious liabilities are an accounting entry that is not based on reality and is instead fabricated or imaginary. These liabilities are often created through fraudulent financial reporting by individuals involved in bookkeeping. This practice can be used to benefit the individual by making the entity pay for liabilities that do not … Read more
What Is Ordering Cost In Accounting? Ordering cost is a fixed expense incurred when placing orders for new inventory. This cost includes transportation, shipping fees, inspection fees, and other expenditures necessary for conveying the order. It is a component of the economic order quantity (EOQ), which is used to determine the optimal quantity of inventory … Read more
What Is Audit Risk And How It’s Assessed? Audit risk is the possibility that financial statements may be materially misstated, despite the auditor’s opinion suggesting otherwise. It is determined by both the material misstatement in the financial statements and the detection risk. Audit risk is composed of inherent risk, management risk, and detection risk. The … Read more
What Are Source Documents In Accounting? In the world of accounting, source documents play a critical role in accurate record keeping and financial reporting. But what exactly are source documents? How are they used? This article will provide an overview of source documents in accounting, explaining their importance and how they work. Have you ever … Read more
What Are Primary Functions of Accounting? Accounting is the practice of recording, classifying, and summarizing financial transactions to provide useful information for decision-making and analysis. It is essential for decision-making, cost planning, and measuring economic performance. Professional accountants use Generally Accepted Accounting Principles (GAAP) when preparing financial statements. Additionally, accounting helps in strategic planning, external … Read more
Are Mortgage Current Liabilities or Non-Current Liabilities Mortgage payable is a liability account that records the unpaid principal amount of a mortgage loan. It is a type of loan secured by a property such as a house, and the borrower must repay the loan with interest over a predetermined period of time. The amount due … Read more