Tuesday, May 27, 2014

The Purpose & Objectives of Financial Reporting

Preparing balance sheets, income and cash flow statements aren’t just prepared for fun by accountants. Rather there is a purpose and there are clear objectives regarding financial reporting. The accounting profession has identified three clear objectives for financial reporting by business enterprises.


Monday, May 26, 2014

A Further Understanding of Internal Controls

The Sarbanes Oxley Act of 2002 mandates that management of public companies will evaluate the effectiveness of its internal control system over its financial reporting. Specifically under section 404 of the Sarbanes Oxley Act, it delegates that management needs to provide statements in its annual report stating that:

1-      “Management is solely responsible for the establishment and maintenance of a solid system of internal control”      and

2-      “Management’s  assessment of the effectiveness of its internal control system”

Saturday, May 24, 2014

The Physics Behind Schedule A – Itemized Deductions

Schedule A – Itemized deductions is a highly complicated tax schedule. It is probably one of the most revered and challenged tax schedules developed by the Internal Revenue Service (IRS). Schedule A is a perfect example of how the tax law accommodates every personal and business financial transaction.