Introduction to Accounting
Accounting is a process of recording, summarizing and reporting financial information of organization. However, true picture of company's monetary position on the basis of which further decisions are made for business operations. The present report is based on understanding case study of One. Tel organization for analyzing financial position as well determining different kinds of risks. It is well known global telecommunication company of Sydney, Australia that provides GSM mobile phone and internet services worldwide. Through this assignment, different risk assessment factors including strategic business and inherent are to be introduced that presents financial statements' true performance of organization. Including this, various business and inherent risks can be understood that affects financial performance of organization. Moreover, concept of going concern including different factors is to be expressed for presenting organization's position. Thus, learners are able to understand concepts of accounting and auditing for identifying actual terms of accounting and financial position of entity for financial plans and controlling over risks occur at workplace through this report.
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1) FACTORS IDENTIFIED FOR INHERENT RISK AT FINANCIAL report level AND STRATEGIC BUSINESS RISK ASSESSMENT
Auditing is an approach in which all financial statements including profit and loss account, balance sheet are checked out critically. Due to misstatement in financial records of the company, various risks are occurred as inherent and strategic business risks. There are various reasons behind this obtaining these risks such as wrong recording of prime books that considers as bases for preparing financial statements and reports. Besides this, due to suspecting theft and fraud, misstatement in accounts are created. Including this, business strategic risks are obtained for presenting economic position of organization and reasons behind errors in financial statements. However, for presenting financial report level, critical evaluation on monetary performance of entity is created that affects further operations. In this regard, both inherent risks at financial report level and strategic business risks' factors can be assessed as below:-
Inherent risks at financial report level
It is related with misstatement in financial statements and external factors as rapid changes in inventories, expiry of patents and so on. However, these kinds of risks are obtained that affects economic position of organization and also able to understand causes behind unbalanced financial statements. Therefore, identifying these risks are able for audit planning as well determining all factors through qualitative and quantitative measures. Thus, inherent risks assessment is beneficial auditors plan regarding overall business operations also guidelines are provided for better improving business operations.
Strategic business risks assessment
All inherent risks including different risks that affects business operations are assessed that generates actual causes for unbalanced financial statements. It includes to analyze assets, liabilities and all particulars recorded in balance sheet also reasons are identified. It is created due to poor decision making of organization and wrong entry in records and reports prepared by entity. It affects further business operations regarding inefficient resources. In accordance to this, strategic business risk assessments are related to auditing in accurate manner as well critically by which further decisions can be made in future time regarding business operations. In this process, all risks are assessed related to entire business operations that is useful for reducing risks related to financial stability and economic growth of organization in future time. However, strategic business risk assessment is a manner of processing auditing as well creating implementations in business operations in future time for enhancing efficiencies of business organization effectively. On behalf of this, auditing and audit planning can be implemented properly to identify all financial statements critically to develop organization's performance adequately. Thus, by analyzing strategic business risks, actual financial position of organization through this assessment that provides guidelines for future business operations.
2) FACTORS AFFECT INHERENT RISK ASSESSMENT AT BALANCE SHEET ACCOUNT
At the time of auditing, all financial transactions are analyzed critically that presents actual economic position of organization also identifies reasons behind misstatement of statements. However, inherent risks' assessment provides different ideas for reducing issues as well creating balance in financial statements' differences. In this regard, various tools and factors are gained that emerges comparison between overall amount of any financial statements. Including this, amount is which hidden in presented financial statements are disclosed through this process that affects business operations. Moreover, hidden amount in financial statements are disclosed through this system that affects further business operations. Thus, during auditing of financial statements, various tools and factors are gained for further decision making process. Including this, reasons behind unbalanced financial statements are gained through this process that presents ideas for reducing risks and solving out issues for accurate recording of financial transactions. It is helpful for preparing financial statements more accurately in future time that affects future decision making process to improve revenue and reducing expenditures for transactions. Besides this, through getting knowledge of issues occurred in financial transactions records, rescue from these faults can be gained for recording all financial transactions appropriately. Along with this, susceptibility to theft or fraud in reports are determined that also presents interrelated risks as well various determinants for future business operations. In accordance to this, it is also analyzed that risk associated through transactions as customer checks or credit card payments can be identified that is helpful for creating corrections in financial records and further making decisions for operating business activities in future time. Including this, risks related to financial records are interlinked with control and acceptable risks that creates various ideas for overall assurance and understanding internal control that is effective management of financial transactions of organization for operating further business activities. In this regard, misstatement of records are managed for creating balance related audit and setting objectives for further adequate account balance. However, detection of risks is created through this process and further planning to achieve effectiveness of finance plans. Likewise, auditing is the best tool for assuring on financial records and reports to reducing audit risks effectively. In this process, monetary misstatement can be managed efficiently.
According to this, inherent risks assessment is evidence of accuracy of financial records by checking out all statements as well quality to assigning amount. In this way, documentation of auditing and all processes are discussed through identifies inherent auditing. Thus, management's attitude towards monitoring financial transactions for effectiveness of business operations. Including this, it is beneficial for effective accounting and summarizing all financial transactions efficiently for adequate financial accountancy as well protecting issues for risks. Hence, inherent and strategic business risks will be reduced through this processes to control over deficiencies. It is management's character to setting of ethical values and creating balance for all transactions. By focusing on reasons behind improper financial statements and unbalanced, various tools can be applied in next further years to make decisions regarding preparing financial statements. Thus, auditing for inherent risks are valuable for managing financial transactions in future time that proceed to making decisions for economic stability and presenting accurate financial records in further years. However, it is benefited for profitability and proper management of all finances. Including this, several guidelines are prepared for managing all funds as well recording all transactions for book keeping and final accounts. Apart from this, knowledge of several kinds of accounts is gained as well methods are achieved for recording financial transactions more systematically and implementing ideas for proper management of all accounting entries. It is useful creating proper communication to support company's value as well emerging efficiencies for preparing reports as clearly as possible. Through this process, various tools are applied for ethical conduct and disregarding for internal control efficiently. Including this, by learning through this risk assessment and auditing of financial transactions, several methods are to be used for proper accountancy and monitoring risks for effectiveness and recording each financial transaction adequately. Thus, by assessing and understanding all risks in financial accounts, further recording can be managed as well different tools can be implemented for internal control.
3) GOING CONCERN AND FACTORS THAT AFFECTS DECISION MAKING PROCESS
Going concern is a kind of accounting concept that is helpful for preparing planning including forecasting and decision making process. Therefore, through this approach actual performance of business organization is analyzed by which further ideas are created for proper management of all business activities. However, various tools are presented for business operations and recording all financial transactions. In this regard, going concern is related with decision making process for adequate accountancy as well preparing plans for proper financial management. Including this, going concern is effective for proper management of all business operations and implementing different ideas to enhance profitability. It is valuable for business effectiveness and enhancing business as well competitive strategies in future time. Therefore, through this process, several decisions are made for assumptions and implementing further innovative ideas to increase organization's effectiveness. It is interrelated with profitability and liquidity of entity to prepare plans and making decisions for further business operations efficiently. Including this, various innovative techniques are implemented for enhancing efficiencies and adequate management of all business operations. Different factors are interlinked with going concern and making decisions for company's proper growth as well sustaining its position for long time period effectively. It involves all processes and different strategies to be focused on and business strategies for further growth as well effective existence of entity. However, different tools are identified for business decision making and implementing plans regarding business operations for competitive advantages. In this regard, various elements and financial transaction recording is gained through this process for better quality services and increasing business and competitive strategies to sustain its good reputation for long time period. Thus, adequate planning procedures are applicable for proper decisions and existing business organization effectively.
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Hence, Going concern concept refers to the common opinion that people have that organization will grow consistently in its business. There are number of factors that affects that existence of the business firm for the upcoming time period. It can be noted that with passage of time competition increased at rapid pace in the market. Sometimes firm failed to compete in the market and due to this reason its business operations curtailed consistently. Many times firm face a loss regularly in its business. Due to this reason there is a probability that firm existence may come to end. This thing may happen through merger and acquisition process under which firm can be acquired by any other firm and in this way firm name completely eliminated and its operations governed by the new firm. Thus, it can be said that going concern concept comes to end with closure in the business operations.
The report is concluded that accounting and auditing of financial transaction is essential for checking out all prepared financial transactions by which errors can be reduced for further business operations. However,significance of auditing is explained that is useful for detecting issues in summary of financial transactions as well reports. Therefore, different reasons behind auditing risks as inherent, strategic business operations are described through this assignment that provides different ideas for accuracy in recording and reporting. Besides this, going concern and several factors are identified for decision making process to improve performance of organization financially as well non-economically. In this project, auditing, accounting and various tools are presented for analyzing financial transactions of One. Tel telecommunication organization's performance for producing mobile and internet services. However, different tools and techniques are understood for proper accountancy and auditing all financial transactions critically by which several ideas can be implemented regarding further business effectiveness and creating balance for all financial transactions and their recording. Thus, different aspects are understood for effective accountancy and implementing strategies regarding recording each transaction through th