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Accounting Challenges for Companies in next two years

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As the implementation date for three major accounting standards closing in, management and board of directors may face challenges not only in implementing these changes but also in reporting and disclosures in their financial statements.

The major accounting standards are:

  • – AASB 9 Financial Instruments (applies from years commencing 1 January 2018, early adoption is permitted);
  • – AASB 15 Revenue from Contracts with Customers (applies from years commencing 1 January 2018, early adoption is permitted); and
  • – AASB 16 Leases (applies from years commencing 1 January 2019, early adoption is permitted)

 

These standards can significantly affect the reporting of values of financial instruments, loan loss provisions, revenue and accounting of lease arrangements. For some companies, the impact on their reported results will be even more significant than was the case with the first time adoption of IFRS back in 2005.

 

What does it means to companies:

 

IFRS 9 Financial Instruments (AASB 9 in Australia) is a project completed in stages over the past decade, to replace IAS 39 (AASB 139 in Australia), is one of the most complex standard and will have an impact on the recognition and measurement of financial instruments. For example, under AASB 139, there are four categories of financial assets, whereas under AASB 9, only two. The new impairment requirements for financial assets are based on a forward looking “expected loss model” (rather than the current “incurred loss” model).

 

Under AASB 15, the revenue will be recognized when control of goods or services is transferred, rather than on transfer of risks and rewards, under AASB 118 Revenue.

 

AASB 16 will supersede AASB 117, the main implication of the changes will be that all leases (subject to certain exceptions) will be capitalized i.e. no more operating leases (subject to certain exceptions) under the new standard.

 

The management and board of directors should plan in advance for these changes. The matters to consider for any implementation plan may include required changes in system (eg. how the required information will be captured by the accounting system), business impact, disclosure required in financial reports prior to the effective dates of the standards, disclosure upon adoption of the standards on effective date, impact on any fundraising and compliance with the financial requirements.

 

DSV Partners can provide you with a range of financial audit and assurance services that will assist the management and board of directors in managing their responsibilities. Our partners are ex Big 4 partner and senior manager with extensive experience in audit and assurance services. For any further information on the upcoming changes in the accounting standards or any other financial audit and assurance related needs, contact Deepak Saboo or Michael Collinson on 02 9633 489 or email directly to dsaboo@dsvpartners.com.au.

 

 

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3 Rules for an Effective Financial Audit

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Financial audit is an important tool for business owners looking to achieve their objectives in the required time period. While performing a financial audit, an auditor is required to obtain an understanding of the company’s business and internal controls, an auditor will become aware of and recommend ways that the entity can improve its internal controls over financial reporting or profitability. The auditors’ are also required to preform certain procedures on company’s policies and procedures related to fraud prevention. Any suggestion from auditors will help improve the policies and procedure to prevent fraud. However, you’ll need to choose accounting services that not only specializes in carrying out an effective financial audit but also help you monitor the efficiency and effectiveness of such an audit. Apart from choosing the best accounting services, what steps you can take to enhance the effectiveness of such an audit? Let’s have a look:

 

  1. Commitment: As a business owner, you have to make sure that everyone in the organization, including the senior management, is fully committed to this critical process. Without the involvement, encouragement and support of everyone, a financial audit will just be a waste of time and money.
  1. Anticipate the needs of stakeholders: So, what do you think is the most important thing that most stakeholders want from a financial audit – information and more information. They need an assurance that the management has necessary and effective processes in place to achieve desired financial goals and manage significant risks in future. In addition, the financial audit team has to be responsive to the changing nature of risks and make sure that the strategies remain relevant in the present and future scenario.
  1. Keep it simple: While it’s true that financial auditors are well versed with all the technical jargon used in financial audit, most of the customers and staff working in an organization do not comprehend most of these terms at all. In order to get the point across, auditors should do everything in their hands to make the reports as simple as possible. If the auditors can take time to explain the meaning of technical terms, such as ‘high-risk’ or ‘significant deficiency’ early on, they have to spend much less time in answering a lot of questions from their audience later on.

For trusted financial audit services in Sydney, contact DSV Partners on 02 9633 4893 or email us at info@dsvpartners.com.au today!

 

 

 

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The Importance of Finding the Right Business Adviser

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Chanakya (350 BCE – 275 BCE), a great Indian teacher, philosopher and economist, and the author of the ancient Indian political treatise, “Arthashastra”, said that a strong foundation is key to any successful business and listed seven pillars for an organization:

 

  • – The King or the Leader
  • – The Minister or the Manager
  • – The Country or the Market
  • – The Fortified city or Head office
  • – The Treasury
  • – The Army or your Team
  • – The Ally or your “Adviser”

 

The choices made by the leader will have a profound impact on the business- be it the choice of hiring a manager and team, market to operate in, or what business advisers to work with. Most businesses focus on hiring a good manager and team, but often forget the importance of a good adviser. Experienced advisers are generally well aware of the problems faced by small and medium size businesses, and they should be able to provide you expert guidance to resolve your business problems right away.

 

Most often, advisers are hired based on the price they quote rather than the value that they can add to the business. By choosing the wrong adviser, a business can face colossal impact on their finances. A recent example would be the case of Commonwealth Bank financial advisers or, in the past, the case of advisers in Enron Energy and Satyam Computers. In all the above cases the advisers/auditors were not acting towards the interests of their clients.

 

A good adviser should always be:

 

  1. Candid – willing to tell their clients “what they need to hear”, and not “what they want to hear”.
  2. Objective – able to hear the concerns of the business owners.
  3. Visionary – looking for new ideas to solve unique problems clients may face, rather than providing a “one size fits all” solutions.
  4. Informed – able to converse about the trends in your industry, latest developments, and share his knowledge for the benefit of your organization.

 

Remember, most importantly, a business adviser should be like a friend. He is the one whom you can depend on when problems arise. After all, a friend in need is a friend indeed.

 

DSV Partners is a suburban firm providing accounting solutions for small and medium size business across Sydney. We provide;

 

 

If you are looking for a trusted business adviser who is capable of taking holistic view of your business and provide an effective solution, please contact DSV Partners immediately! We eagerly look forward to working with you.

 

 

Why Many Businesses in Australia Prefer Using Professional Providers of Accounting Services

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Commercial establishments operate to generate revenue and profits. However, just as individuals need to pay income tax, commercial establishments need to pay the appropriate taxes as well. For this, they will require accurate and meticulous records of their earnings and expenses. Unfortunately, many small business owners have little time to spend on keeping their books up-to-date. Many business owners have little understanding of accounting as well. Even worse, some businesses do not even employ professional accountants. As a result, when they need to file their tax return, they usually find themselves tied up in knots. The best way for eliminating these issues lies in hiring firms that offer cost effective accounting services.

 

 

How Business Enterprises Can Benefit by Hiring Providers of Accounting and Bookkeeping Services

As mentioned earlier, maintaining accurate books is a necessity for any commercial venture. Without this, the business owner will hardly have any idea about how well or poorly the business is faring. Moreover, the lack of proper accounts could trip up the business owner at the time of filing the tax return. This is why businesses need to record all financial transactions such as sales, purchases, income and payments accurately.

Having an in-house accountant could be costly. But, a professional outfit could provide the best bookkeeping services at prices within your budget. In addition, they could offer effective accounting solutions as well. Professional accounting firms are experts when it comes to

  • – Understanding your business and keeping your best interests at heart
  • – Offering tailored financial accounting solutions that meet your specific requirements
  • – Providing expert, friendly and personalised services in all financial matters ranging from accounting to tax-related matters
  • – Preparing and maintaining accurate and detailed financial statements concerning your business and,
  • – Providing various business advisory and auditing services to keep you compliant

 

 

DSV Partners – The Sydney Accountants Who Specialise in Offering Personalised, Accurate and Cost Effective Accounting Services

Whether you need the services of a tax agent in Sydney or assistance during a financial audit, you need the services of a top accountant. This is why it pays to engage a professional accounting firm for managing your accounting requirements. At DSV Partners, we specialise in managing accounts and preparing tax returns for businesses. Our team of experts can keep your accounts accurate and tax efficient. We can deliver the best tax planning solutions for enhancing your profits too. And, if you need audited financial statements, we can assist with this as well. To see how you could benefit by partnering with us, click here.

 

 

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