What are the accounting entries for tax refund?
Dr. Cash
Cr. Provision for Taxation (B/S)
Being recognition of tax refund receipt
Dr. Provision for Taxation
Cr. Taxation Expense (P/L)
Being recognition of tax refund in Profit & Loss statement (upon finalization of YA)
As noted above, a tax refund is offset against the taxation recorded in P/L ( as evident from crediting taxation). Be noted that, a tax refund is potential indicating that the tax computation is at its final stage ( more or less finalized). Hence, any excess provision with respect to the particular Year of Assessment should be re-assessed / reversed out accordingly.
Thursday, October 30, 2008
Wednesday, October 22, 2008
Hedge Fund Accounting Software
Disclaimer: this is not an advertorial thread
We came across a very powerful hedge fund accounting software, whereby all the computations are computed automatically, including analysis report, graph, charts, internal reporting purpose. The advanced technology avaialable in the market has resulted in the substantial change in the role of accountant, espeically fund accountant.
Hedge fund is a high-end area, where sophisticated accounting software have been developed to make the accounting process easier and faster. Imagine this: by inputing the details (e.g. share price), the reports, charts, entries are automatically generated.
However, a hedge accounting software should not disable a fund accountant ability to understand the concept, the journal entries, the accounting framework, and the relevant accounting standard, espeically IAS 39.
We came across a very powerful hedge fund accounting software, whereby all the computations are computed automatically, including analysis report, graph, charts, internal reporting purpose. The advanced technology avaialable in the market has resulted in the substantial change in the role of accountant, espeically fund accountant.
Hedge fund is a high-end area, where sophisticated accounting software have been developed to make the accounting process easier and faster. Imagine this: by inputing the details (e.g. share price), the reports, charts, entries are automatically generated.
However, a hedge accounting software should not disable a fund accountant ability to understand the concept, the journal entries, the accounting framework, and the relevant accounting standard, espeically IAS 39.
Saturday, October 18, 2008
#51- Bank Reconciliation
Is bank reconciliation prepared by an account executive considered a control in the financial preparation process?
The answer to this question is very ambiguous. As there are risk that Account Executive set aside one balancing figure, in order to tally the total reconciling items. Hence, preparation of bank reconcilition itself does not form part of the control. However, if there are a superior review the bank reconciliation prepared, the above-mentioned risks can be mitigated.
Hence, reviewing bank reconciliation is considered a control.
The answer to this question is very ambiguous. As there are risk that Account Executive set aside one balancing figure, in order to tally the total reconciling items. Hence, preparation of bank reconcilition itself does not form part of the control. However, if there are a superior review the bank reconciliation prepared, the above-mentioned risks can be mitigated.
Hence, reviewing bank reconciliation is considered a control.
Wednesday, October 1, 2008
# Auditing Tools
Someone ask me a question over the tea-break:
" What are the common software used by auditors?"
No doubts, the answer is spreadsheet ( e.g. Microsoft Excel) and text documents ( e.g. Microsoft Words). Thanks to the fabulous spreadsheet function contructed by the programmers. If not, I can't imagine the time you need to spend when you need to cast more than 100 balances.
To illustrate further, some of the audit firms have developed their own auditing software, which was used for their audit engagements. Everything was properly linked up (e.g. associate risk to an account assertion) in the software application. In our opinion, the software helps to develop and strengthen the auditing concept if efforts have been spent on understand the audit concept.
For instance, Ernst & Young has developed its auditing & assurance tools, GAMx for its audit engagement, as described in Ernst & Young Website
http://www.ey.com/global/content.nsf/International/Assurance_-_Tools_and_Resources
" What are the common software used by auditors?"
No doubts, the answer is spreadsheet ( e.g. Microsoft Excel) and text documents ( e.g. Microsoft Words). Thanks to the fabulous spreadsheet function contructed by the programmers. If not, I can't imagine the time you need to spend when you need to cast more than 100 balances.
To illustrate further, some of the audit firms have developed their own auditing software, which was used for their audit engagements. Everything was properly linked up (e.g. associate risk to an account assertion) in the software application. In our opinion, the software helps to develop and strengthen the auditing concept if efforts have been spent on understand the audit concept.
For instance, Ernst & Young has developed its auditing & assurance tools, GAMx for its audit engagement, as described in Ernst & Young Website
http://www.ey.com/global/content.nsf/International/Assurance_-_Tools_and_Resources
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