(FPPFS) Timeliness: Accounting information must be presented in a timely manner to be useful. If the information is not presented to users in a timely manner, its usefulness is diminished. For example, income is recognized over the period of time when its actually earn and same as expenses, a period in which they incur. Financial reports should be made on time and available to the users so that they would be able to make their decision considering the present situation of the company. Understandability: Clearly presenting the information and classifying it, can make the accounting information understandable.
Sarbanes-Oxley Act (2002) Developed by U.S senator Paul Sarbanes and U.S representative Michael Oxley and enacted in 2002, the Sarbanes Oxley Act sought to delimit the increasing level of financial fraud. The sought enhance the accounting process by ensuring that the top management remained actively involved on an individual basis in the analysis and certification of the accuracy levels pertaining to company financial information. The Act was developed in an effort to reduce and consequently eliminate fraudulent financial activity incorporated by the accounting element in firms. The Act set up dire penalties pertaining to fraudulent financial activity, which was necessary following the Tyco International and WorldCom that led to the loss of billions in investor money as the financial scandals led to the depreciation of the share prices leading to consequent sock loss in
The primary cause of an IT infrastructure audit is to guarantee all IT resources available within a business or organization reach set goals and performance has been achieved while following the correct and the most appropriate processes. The specific objectives of undertaking an IT infrastructure audit may include: · Ensureing that the set infrastructure is compliant with the legal and regulatory requirements. · Ensuring that the IT infrastructure enforces the confidentiality of its corporate data. · Assessing whether the IT infrastructure in an organziation helps in attaining and maintaining data integrity. · Ensureing that the IT infrastructure guarantees availability and reliability of the available
Managers and auditors ensure that goals are achievable and useful to the company. Managers assess the corrective actions needed based on the findings of the audit team. They offer support and oversight to ensure the resolution of issues in a timely manner. The audit team cannot dictate decisions. It can only make recommendations based on its assessments of the change management
Internal environment consists of evaluating internal resources of the organisation like product, human resources, systems, finances and marketing strategy. At Coconut bliss human resources is given utmost importance. Product portfolio analysis is done to know the effectiveness of a brand to the
Throughout the case, it can be seen how Cendant Corporation was performing activities that dealt with the interactions of income smoothing. The main cause of performing with Income Smoothing was to make their shareholders and investors believe that they had a professional and ethical operation running. Income smoothing can best be represented as how either gains or losses from a certain period are taken into a good or bad period with losses or no profits. Income smoothing throughout this case was used as an unethical practice performed by Cendant Corporation to achieve financial stability and falsify numbers to make the investors believe they had premium stocks when in reality it wasn’t what was really occurring which would then lead to the
Credit enhancement is a process whereby basic collateral is used as a security to protect a potential risk and losses. Normally, credit enhancement is provided by external guarantors and the result of a security structure. External credit enhancement act as guaranty for all promised payments to the securities whereby it is also can be a third party of financial guaranty firm or be a corporate issuer of the security. While internal credit enhancement are created by subordinated on cash flow of the security or bonds to other senior obligations. To do it functions, subordinated has a difficult rules that need to describe the distribution cash flow.
Reasonable esteem accounting upgrades the instructive energy of a budgetary proclamation rather than the other bookkeeping technique - the authentic cost. Reasonable esteem bookkeeping requires a firm to unveil broad data about the strategy utilized, the supposition made, hazard introduction, related sensitivities and different issues that outcome in a careful money related articulation. Moreover, Dependable Information, For a money related information to be solid, they should be undeniable and impartial. Since reasonable esteem is induced from the market cost of a given resource, this esteem can be checked looking back from accessible data about the present and past market costs. Since it is important to incorporate the system and reveal the data about conceivable deviations from a cited cost in the money related articulation, this data can likewise be
This levy has raised ethical concerns commonly known as tax avoidance and tax evasion. Tax avoidance is the lawful attempt to minimise expenses by deducting taxes in order to decrease tax bills. Tax evasion is the illegitimate practice of not paying taxes by not disclosing certain income or reporting expenses that are not legally permitted. Tax planning is established in order to minimise unethical issues that arise from tax levies and to ensure efficient tax usage. Irrespective of where a country lies in terms of development, the enactment of the tax levy will affect it.