evaluating accounting policy


O

omarfdawood

Dear Experts,
How can I evaluate the accounting policy for a specific firm? Is it
for example by following a set of standards?
Many thanks in advance
Omar
 
P

Paul Thomas, CPA

How can I evaluate the accounting policy for a specific firm?



Primarily, the accounting policy must meet the needs of management, the
owners and any other users of the resulting financial reports.
Secondarily it must meet any requirements of regulators, laws, etc.

If necessary there are two or more sets of books, accounting, cost, tax,
etc. They're not intended to mislead anyone, but to provide the types of
information the users of the accounting data need to make informed
decisions.
 
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R

Rocinante

Dear Experts,
How can I evaluate the accounting policy for a specific firm? Is it
for example by following a set of standards?
Many thanks in advance
Omar
External auditors can help you with compliance and financial audits to
determine if your company is following a set of standards. Briefly,
they would do this through interviews/questionnaires/sampling/testing
to assess the risk of non-compliance. It's quite interesting how they
do it because they do not have to examine every single document that
is generated by accounting transactions in order to give a company a
good rating (low-risk).
 

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