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Wednesday, February 10, 2016

Audit Insights: The Vouching Process


One of the required tasks that auditors do in performing audit engagements is vouching. In my definition, vouching is a term used for inspecting the documents. Well as auditors, we need to understand the systems used, the processes and procedures done, the internal controls in place, the business systems, among others.

After being able to understand the processes, we will now identify the controls that the Company used in order to safeguard its assets and to detect fraud and error. We call these controls as attributes of our testing. Once we established our attributes, we will now test the documents supporting the transactions (e.g., inventory movements, cash deposits, etc.) based on the samples selected.

Well yeah audit is pretty challenging and toxic. But you've got to learn many things when doing an audit especially when you are exposed to different industries ranging from banks to healthcare institutions.

Sunday, February 7, 2016

Financial Doctors and their importance to the Business Environment

Frances Ouano Ponce

Since the start of the 19th century, business transactions are becoming complex. The concept of
Capitalism has led several businessmen to venture into different kinds of businesses to accumulate wealth.

One the other hand, the rise of the information technology and the world wide web (WWW) has raised the complexities of doing business. Although, information technology and the internet made significant contributions in processing voluminous business transactions we do everyday-- it had also brought with it several security risks and other risks inherent in doing business the automated way.

In the meantime, business executives and stakeholders nowadays make their business decisions based on information provided from the information systems they installed in their businesses. These information are very vital for the success of their organization and businesses.

Due to certain risks (e.g., inherent risks, control risks and information risks) present in a business information system, these stakeholders require and seek the services of qualified professionals who will do the risk assessment and provision of valuable opinion that would help them manage critical decisions.

These professionals are like financial doctors. They are called doctors in a way that they find indications of weaknesses and risks present in an information system. These doctors are very knowledgeable to different business processes from different industries.

Furthermore, they can also provide valuable opinions and possible remedies that could help businesses grow and improve their operations. Businesses cannot grow without the aid of these financial doctors.

Sunday, January 31, 2016

Cloud Computing and the Future of Business: New Challenge for CPAs

The cloud controls "Everything".
Photo owned by wikipedia.org
Frances O. Ponce

Microsoft Onedrive, Apple ICloud, Microsoft Dynamics, Oracle and the like-- these are just a few of the large companies offering cloud services both to individuals and organizations.

If you do not know what cloud computing is, you can always refer, as most of us do, to google or dictionary.com for its definition.

Nevertheless, cloud computing covers a very broad range of topic including the cloud-integrated Enterprise Resource Planning or Program (ERP) in which large companies nowadays such as Procter & Gamble and Citibank are continually investing huge amounts of their resources to stay competitive and strong; and the cloud storage which is most common to the general public.

In my own definition, cloud computing is doing business in the "cloud". The word cloud pertains to the World Wide Web or the Internet. Our businesses could range from saving important documents like bank transactions and reports to business processes like cash receipting and sales.

I could say that cloud technology is the future of "Everything". It will turn out one day that every single data entry in business processes are directly done through the cloud-- paperless, fast and automated. Even the groceries that you regularly buy, in the future will be done through the cloud and this is quickly changing the business practices on commodities.

Reviewer in Analysis of Variances from Standard Costs

Standard costing is widely discussed in the Management Services domain of the Certified Public Accountant (CPA) course. Looking back to the College years, I remembered that we practiced a lot of computations using various standard formula, and some other through arrow illustrations-- the same as the one shown in the picture.

As far as I can remember, the essential lesson we can get from this topic is the computation of variances-- be it efficiency or spending. Computation of variances for budgeted hours as to actual hours (efficiency variance) is quite easy; however, there are complicated concepts we need to study in standard costing, like for example the computation of variance of the budgeted overhead as to the applied overhead.

Anyway, so much for the talking about standard costing. What you need to do is to fervently study anyway. On the other hand, I want to share with you an old reviewer I'd got from my sister. I already forgot the author but as far as I know, the reviewer is quite comprehensive. It covers everything and most of the questions are also somewhat related to the ones came out during the CPA Board Examinations.

Here's the download link:


Watch out for other releases related to other topics in the Management Services domain.

*Author's Note: These materials are intended solely for review and academic use specifically published to help aspiring CPA Reviewees and accountancy students prepare for the Philippine Certified Public Accountant (CPA) Board Examinations. Copying and distributing such materials are considered violations of the copyright law and may result to legal proceedings.
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