Importance of Segregation of Duties - 2844 Words

Segregation of Duties Introduction An important function of the accounting field is to provide external users of financial statements with assurance that the financial information being presented is both reliable and accurate. This basic function of accounting is so important that there is an entire field of experts, called auditors, dedicated to assuring its proper performance. Throughout history there have been many instances in which the basic equilibrium between an institution and current/potential investor has been threatened due to a lack of accountability and trust between the two parties. This issue has been the catalyst for many discussions regarding the proper procedures a firm should follow in order to provide†¦show more content†¦These changes were outlined in the Sarbanes Oxley Act of 2002 (SOX). SOX completely revolutionized financial reporting, requiring senior management of firms to sign off on each financial statement that the company issues. It also stipulated that wrongful doing can result in not only termination but also imprisonment. SOX amplified the requirement for companies, requiring firms to maintain proper levels of internal controls when it comes to operating activities. SOX also established the creation of the Public Company Accounting Oversight Board (PCAOB) which implemented stricter auditing standards for public accounting firms. Not only were accounting firms required to consider internal controls, but they were also required report any significant deficiency directly to the board of directors. SOX stressed the importance of internal controls, and within internal controls it established the need for segregation of duties. Since this time, there have been many additions to accounting policies regards segregations of duties, and many functions of the business process dedicated to it. Business Risk Consideration in IT Auditing Business risks that plague today’s businesses can be far reaching and varied. 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If You Think You Can, You Can Free Essays

â€Å"IF YOU THINK YOU CAN, YOU CAN† is a common phrase which we often use in vain. It means that if you have will and determination you will always find a way to success. For reaching the peaks of glory you should have a will to cross any hurdle that comes in your way. We will write a custom essay sample on If You Think You Can, You Can or any similar topic only for you Order Now WINNERS NEVER QUIT AND QUITTERS NEVER WIN. Life’s battles don’t always go To the stronger or faster man. But sooner or later the man who wins, Is the man who thinks he can. Good morning everyone, today I Sunjit Dhillon of class IX-A stand before you to share my views on the topic IF YOU THINK YOU CAN, YOU CAN.Will-power is the greatest driving force in man. It helps him get through all the difficulties in life. Will-power is the most essential ingredient of success. It enables a person to find a way to overcome the obstacle in his path. He continues his journey towards his chosen goal. A man who loses heart at the sight of failure can never achieve his goal. But a man who is determined to attain his objectives is not disheartened by failures. One should not lose heart during adversities. The real essence of life lies in struggle.Determination and calmness help a person in his endeavour. They provide him inspiration to achieve success. Mahatma fought for the blacks in South Africa. Martin Luther brought about radical changes in the USA and Abraham Lincoln became the President of the USA by dint of his strong determination and continuous efforts. A patient with strong determination can get cured earlier or live longer than a similar patient with weak will power. Helen Killer was both blind and deaf, but she became an educator of the blind. Louis Braille was also a blind educationist.He introduced the Braille script for the blind. Sudha Chandran has an amputated leg, but even with the artificial limb, she has become a famous Bharatnatyam dancer and actress. Thus, a person of strong will power can overcome physical disabilities in the pursuit of his goal. Man’s strong desire and will-power have led to the discovery of unknown lands. One should strive hard for achieving success. Never forget, where there is a will, there is a way ! It’s your attitude that lets you win If you think you can, you can!. If you think you can, you surely can! Thank You. How to cite If You Think You Can, You Can, Papers

Impairment of Goodwill and Deferred Taxes

Question: Discuss about the Impairment of Goodwill and Deferred Taxes. Answer: Introduction In this report a complete study has been prepared over the impairment test of under AASB 136 on the assets of The Longreach group Ltd. This company is private equity firm typically invest in mature industrials and financial services around the globe. There are various recent economic changes which have thrown a spotlight on the impairment test. As such many entities around the globe considered to evaluate their impairment testing process, identified models and assumptions. AASB 136 as amended is equivalent to IAS 136 which is used for implication of impairment test on the items shown in the financial statement of organization. In this report complete study has been prepared over how impairment test could be performed by The Longreach group Ltd in accordance with IAS 36. Purpose of impairment test An impairment test is newly adopted mechanism started in Australia to measure whether the items in financial statement is shown at its true values . By using the impairment test in accordance with AASB 136 could reduce the amount shown in balance sheet by either its intangible or tangible assets if impairment test indicates lower value. Impairment testing can be applied for different accounting process named commercial accounting and tax accounting. However, various countrie have different accounting standards and justifications for implication of impairment test. It is observed that international financial accounting standard have been followed by several countries for impairment test of amount stated in balance sheet. The mainly purpose of this test is to make changes accordingly to identify whether assets are put at not more than their recoverable amount. Common mistakes in impairment test include calculation of wrong impairment amount, discount rate and terminal value. Impact on the impairment test with the existence of goodwill Ideally in the business functioning of the organization there is needed to identify the true value of items stated in Balance Sheet. Therefore company has to use impairment test if on the reporting date an assessment made indicates that carrying amount of an assets exceeds its recoverable amount. However, goodwill will be taken for impairment test on annual basis (Godfrey, et., al., 2009) Testing of goodwill for impairment For impairment test, acquired goodwill in business will affect the impairment test on CGU (group of assets that generate cash inflow). Goodwill must be given to CGU that are expected to take benefits from the synergy of combination of two businesses. In this case yearly impairment test for the CGU to which goodwill was allocated must be performed at reporting time. It is observed that wile implementation of impairment test CGU needs to be undergone with the impairment test without containing goodwill in its business functioning. Then individual test would be done to identify the true value of all the asset of The Longreach group Ltd. By using this test it could be evaluated that whether company has created value or not by acquiring goodwill in its business functioning. In this impairment testing IAS 36 needs entities to compare their past value of cash inflow to actual cash inflow in assessment (Hart, et., al., 2008). If good will exists in the business functioning of The Longreach group Ltd then recoverable value of intangible assets in impairment test would be based on either enterprises value or equity value. At the time of recoverable amount based on enterprises value the results should be compared with invested capital. In case of equity value it should be based on common shareholder equity. If the recoverable amount based on enterprises value is less than investment amount of company then impairment test would be implemented to reduce the value of goodwill to the certain computed amount. However, carrying amount of assets should not be reduced below the highest of fair value less cost of capital or value in use or zero (Sorros, et., al., 2015). Basis steps for introducing impairment test AASB 136 prescribes procedure for Longreach group Ltd to ensure whether assets are carried out or recorded at no more than their recoverable amounts. However standards applied to all the assets except for the following types of assets has shown as below. For the effective impairment test Longreach group Ltd would indulge in recoverable test for identifying the true values of items shown in balance sheet. This test identifies the sum of undisclosed proposed future cash inflows with the carrying amount of assets. If carrying amount is greater than the amount computed then assets would be considered not recoverable. Longreach group Ltd has to check following basic steps for applying impairment test (Sorros, et., al., 2015). Identification of recoverable amount of assets. Present and future cash inflows from the business functioning while acquiring goodwill. Application of all accounting standard in accordance with IAS 36 for implementing impairment test. Benefits to different set of CGUs in business functioning of Longreach group Ltd This above graph depicts how company has to implement impairment test for identifying the impairment benefits and loss for the true and fair value of assets shown in the balance sheet (Li, et., al., 2011). Conclusion In this essay various facts and figure of assets shown in the balance sheet of Longreach group Ltd has been taken into consideration. This impairment test has been followed in this report which provides key aspects to evaluate the true value of assets of organizations. Now in the end it would be said valuation in assets are found consistently due to various reasons. Therefore company should apply impairment test on annual basis to identify true exact value of assets stated in balance sheet of the company. References Detzen, D., Stork genannt Wersborg, T. Zlch, H. 2016, "Impairment of Goodwill and Deferred Taxes Under IFRS",Australian Accounting Review,vol. 26, no. 3, pp. 301-311 Godfrey, J.M. Koh, P. 2009, "Goodwill impairment as a reflection of investment opportunities",Accounting and Finance,vol. 49, no. 1, pp. 117-140. Li, Z., Shroff, P.K., Venkataraman, R. Zhang, I.X. 2011, "Causes and consequences of goodwill impairment losses",Review of Accounting Studies,vol. 16, no. 4, pp. 745-778 PETERSEN, C. PLENBORG, T. 2010, "How Do Firms Implement Impairment Tests of Goodwill?",Abacus,vol. 46, no. 4, pp. 419-446. Sorros, J., Belesis, N. Karagiorgos, A. 2015, "The Reliability of Impairment Tests: The Case of Vessels",Procedia Economics and Finance,vol. 32, pp. 1787-1793.