Even though the accounts receivable ratio is often a good indicator of a company's payments collecting ability, it could be misleading. It is an average and because of that customers that carry high balances and pay quickly could skew the average, concealing a problem with the majority of accounts with small balances. ▪ Accounts receivable aging report – lists unpaid customer invoices by date ranges. The purpose of this report is to show the business owner what receivables need to be dealt with more urgently because they have been overdue longer. Companies can use an aging report to determine whether it is taking on too much risk, because past due tend to get more difficult to collect the older they become.
As seen above, forensic auditing involves a wide spectrum of engagements that particularly revolve around investigative work. The investigation includes financial malpractices and fraud investigation. Yet further, forensic accountants are invited as expert witness in the event the investigated fraud is subjected to judicial proceedings. Forensic accounting on the other hand refers to specific progressive procedures carried out to produce evidence (Gerson, J., Brolly and Skalak, 2011). It is a procedure that involves auditing techniques to identify and gather evidence to prove the nature of the fraud and develop the context of the fraudulent activity.
Financial reports as stated in IGBEN(1999), are meant to be a formal record of business activities and these reports are meant to provide an overview of the financial position and profitability in both short and long term of companies to the users of these financial statements, but in recent times; the financial manipulations, weak control system and other fraudulent activities that occur within companies creates a negative goodwill to the general public. The impact of financial fraud in business organizations cannot be overemphasized. It has led many companies to liquidation and some to stagnation. It is against this landscape that the following questions will be raised: Can forensic accounting minimize fraud in Nigeria companies? Does forensic accounting increase the credibility of financial statements?
Identified intangible assets is the sum of the carrying amounts of all intangible assets, not include goodwill, as at the balance sheet date, net of accumulated amortization and impairment charges. Intel Corp.'s identified intangible assets declined 2013 (5,150 million) to 2014 (4,446 million). Goodwill is the amount paid more the fair value of any asset in the acquire, adjusted for any amortization recognized prior to the adoption of any changes in generally established accounting principles and for any impairment charges, go beyond of the fair value of net assets acquired in one or more business combination transactions. Intel Corp.'s goodwill increased from 2013 (10,513 million) to 2014 (10,861 million). Identified intangible assets and goodwill is the sum of the carrying amounts of all intangible assets,
The company must identified the transactions that are related to the business are recorded in the accounting system. For example, a business transaction is occurred when the company purchased a motor vehicle. As a result, the event was identified and the new asset purchased should be added to the accounting
They both have clear classification on different kinds of asset; for example, assets under construction are differentiated as the normal intangible asset, calculating at “cost less any recognized impairment loss”. It also comprise of detailed definition on which part of the asset are considered as Intangibles and how it is amortized and recorded, i.e. they both mentioned that software that is “not an integral part of a related item of computer hardware is treated as intangible asset” . However, M&S takes more focus on where to locate the specific items, for example, the acquire brand values can be found on the Statement of Financial Position at cost. Also M&S reveal more detailed on what costs are
The useful life of an intangible asset is the period over which the asset is expected to contribute to the future cash flows of the entity. Intangibles with a fixed useful are amortized. However, intangibles with indefinite useful lives are not amortized but are subject to impairment. Other relevant factors include the legal or contractual provisions, the level of maintenance expenditures required to obtain future cash flows, and the effects of obsolescence. (para 11 SFAS 142) c) Jonas Tech Corp’s suggested treatment of goodwill is unacceptable because the U.S. GAAP requires that goodwill acquired in a business combination is allocated to the reporting unit through which it was obtained.
Forensic accounting is a difficult field to work in but it assures financial security and priceless experience while serving the nation. Job Description Forensic accountants analyze and investigate financial reports to look for signs of inconsistencies which indicate fraud. In such cases, forensic accountants will restructure the process and activities related to financial abuse in an organization. These experts will show presentations with supporting legal documents and real company data as proof that fraud actually took place. The court may ask them to testify about their investigation results.
Retrieved September 23, 2015, from http://www.i-capitaladvisors.com/wp-content/uploads/2009/02/IMA_SMA_ Intangibles_0719101.pdf OECD (2011;a). New sources of growth: intangible assets. (2011, September 1). Retrieved October 2, 2015, from http://www.oecd.org/sti/inno/46349020.pdf Untangling intangible assets – OECD Observer. (2011;b).
Even when the analytical procedures indicated significant red flag, but auditors still did not pay special attention to it. Therefore, the inventory were more than quadrupled between 1984 and 1987. Auditors did not count inventories properly during the process of inventory counting, they asked people to move the inventory when the inventory in the warehouse was stacked and placed in rows, therefore, the inventory count was inaccurate. Auditors should ask the company to provide a detailed inventory record so that they can have something in mind during inventory counting. According to AU-C Section 501 Audit Evidence-Specific Considerations for Selected Items, Paragraph .11- if inventory is material to the financial statements, the auditor should obtain sufficient appropriate audit evidence regarding the existence and condition of inventory