Forensic accounting, forensic accountancy or financial forensics is the specialty practice area of accounting that describes engagements that result from actual or anticipated disputes or litigation. The work performed and reports issued will often provide answers to the how, what, Forensic means suitable for use in a court of law, and it is to that standard and potential outcome that forensic accountants generally have to work. Forensic accountants, referred to as forensic auditors or investigative auditors, all of the larger accounting firms, as well as many medium-sized and boutique firms and various police and government agencies have specialist forensic accounting departments. Financial forensic engagements may fall into several categories, Forensic accountants often assist in professional negligence claims where they are assessing and commenting on the work of other professionals. Forensic accountants are engaged in marital and family law of analyzing lifestyle for spousal support purposes, determining income available for child support, engagements relating to criminal matters typically arise in the aftermath of fraud.
They frequently involve the assessment of accounting systems and accounts presentation—in essence assessing if the numbers reflect reality, some forensic accountants specialize in forensic analytics which is the procurement and analysis of electronic data to reconstruct, detect, or otherwise support a claim of financial fraud. The main steps in forensic analytics are data collection, data preparation, data analysis, for example, forensic analytics may be used to review an employees purchasing card activity to assess whether any of the purchases were diverted or divertible for personal use. In the United Kingdom, relevant legislation is contained in the Proceeds of Crime Act 2002, in India there is a separate breed of forensic accountants called Certified Forensic Accounting Professionals. Forensic accountants may be involved in litigation support and investigative accounting. The American Board of Forensic Accounting was established in 1993, for more information please visit http, //abfa. us/ For effective learning, professionals will need expert training in the practices of forensic accounting.
The American Board of Forensic Accounting offers the Forensic Accounting Review, http, //abfa. us/far/ The CRFAC is a valuable credential and covers the broad base of forensic accounting knowledge. Http, //abfa. us/resources/ The American Board of Forensic Accounting offers many programs, FACB plays several roles and one the roles is standardization of the examination and certification of forensic auditors globally. All certification is renewed on an annual basis, apart from practitioners certification, FACB is an oversight body which accredits prospective member organization before admission as part of quality checks. Persons with the FACB credential can practice as forensic auditors on a global scale, large accounting firms often have a forensic accounting department. Forensic accounting and fraud investigation methodologies are different than internal auditing, thus forensic accounting services and practice should be handled by forensic accounting experts, not by internal auditing experts.
That is necessary if the fraud comes to trial, the jury will be made up of ordinary laypersons. On the other hand, internal auditors move on checklists that may not surface the evidence that the jury or regulatory bodies look for, the fieldwork may carry out legal risks if internal auditing checklists are employed instead asking to a forensic accountant and may result serious consultant malpractice risks
In many jurisdictions, professional accounting bodies maintain standards of practice and evaluations for professionals. Such professionals are granted certain responsibilities by statute, such as the ability to certify an organizations financial statements, non-qualified accountants may be employed by a qualified accountant, or may work independently without statutory privileges and obligations. The Big Four auditors are the largest employers of accountants worldwide, most accountants are employed in commerce and the public sector. The Institute of Chartered Accountants of Scotland received its Royal Charter in 1854 and is the worlds first professional body of accountants, a Chartered Management Accountant must be a member of the Chartered Institute of Management Accountants. A Chartered Public Finance Accountant must be a member of the Chartered Institute of Public Finance, an International Accountant is a member of the Association of International Accountants. An Incorporated Financial Accountant is a member of the Institute of Financial Accountants, a Public Accountant may be a member of the Institute of Public Accountants.
Registered Qualified Accountant is a member of Accountants Institute, excepting the Association of Certified Public Accountants, each of the above bodies admits members only after passing examinations and undergoing a period of relevant work experience. Once admitted, members are expected to comply with ethical guidelines, the ICAEW, ICAS, ICAI, ACCA and AAPA are five Recognised Supervisory Bodies RSB in the UK. It is illegal for any individual or firm that is not a Statutory Auditor to perform a company audit, the ICAEW, ICAS, ICAI, ACCA, AIA and CIPFA are six Recognised qualifying bodies statutory RQB in the UK. A member of one them may become a Statutory Auditor in accordance with the Companies Act. All six RQBs are listed under EU mutual recognition directives to practise in 27 EU member states, further restrictions apply to accountants who carry out insolvency work. In addition to the bodies above, technical qualifications are offered by the Association of Accounting Technicians, ACCA and AIA, other international bodies such as ACCA and Institute of Chartered Accountants in England and Wales enjoy recognition for the purposes of supporting their members in their careers.
For instance, ACCA has achieved recognition by the Tax Practitioner Board, as Tax and BAS agents, Chartered accountancy is governed in Bangladesh by the Institute of Chartered Accountants of Bangladesh. And The Institute of Cost and Management Accountants of Bangladesh offers management accountant studies in Bangladesh, up to 2013, there were three nationally recognized accounting designations in Canada, Chartered Accountant, Certified General Accountant, and Certified Management Accountants. The national CA and CGA bodies were created by Acts of Parliament in 1902 and 1913 respectively, cGA-Canada integrated with CPA Canada on October 1,2014, completing the unification of Canada’s accounting profession at the national level. All recognized national and provincial accounting bodies in Canada have now unified under the CPA banner, the Canadian CPA designation is held by more than 200,000 members in Canada and around the world. Chartered accountancy is offered in India by the Institute of Chartered Accountants of India and this Institute was established in 1949 under the Chartered Accountants Act,1949 for the regulation of the profession of Chartered Accountants in India.
The ICAI set up the Accountancy Museum of India in 2009 and it is currently located at ICAIs office in Noida
One simple definition of management accounting is the provision of financial and non-financial decision-making information to managers. Performance management—developing the practice of business decision-making and managing the performance of the organization, risk management—contributing to frameworks and practices for identifying, measuring and reporting risks to the achievement of the objectives of the organization. The Institute of Certified Management Accountants, Management accountants therefore are seen as the value-creators amongst the accountants. They are more concerned with looking and taking decisions that will affect the future of the organization, than in the historical recording. In 2014 CIMA created the Global Management Accounting Principles, the result of research from across 20 countries in five continents, the principles aim to guide best practice in the discipline. Focus, Financial accounting focuses on the company as a whole, Management accounting provides detailed and disagregated information about products, individual activities, plants and tasks.
Traditional approaches limit themselves by defining cost behavior only in terms of production or sales volume, in 1993, the Accounting Education Change Commission Statement Number 4 calls for faculty members to expand their knowledge about the actual practice of accounting in the workplace. Variance analysis is an approach to the comparison of the actual and budgeted costs of the raw materials. Other approach that can be viewed as innovative to the U. S. is the German approach, one of the more innovative accounting practices available today is resource consumption accounting. Consistent with other roles in corporations, management accountants have a dual reporting relationship. A function of management accounting in such organizations is to work closely with the IT department to provide IT cost transparency, given the above, one view of the progression of the accounting and finance career path is that financial accounting is a stepping stone to management accounting. Consistent with the notion of creation, management accountants help drive the success of the business while strict financial accounting is more of a compliance.
Activity-based costing was first clearly defined in 1987 by Robert S. Kaplan and W. Bruns as a chapter in their book Accounting and Management, A Field Study Perspective. For example, increased automation has reduced labor, which is a direct cost, but has increased depreciation, the term Grenzplankostenrechnung, often referred to as GPK, has best been translated as either marginal planned cost accounting or flexible analytic cost planning and accounting. GPK is published in cost accounting textbooks, notably Flexible Plankostenrechnung und Deckungsbeitragsrechnung, in the mid- to late-1990s several books were written about accounting in the lean enterprise. The term lean accounting was coined during that period and these books contest that traditional accounting methods are better suited for mass production and do not support or measure good business practices in just-in-time manufacturing and services. The movement reached a point during the 2005 Lean Accounting Summit in Dearborn, Michigan. 320 individuals attended and discussed the advantages of a new approach to accounting in the lean enterprise,520 individuals attended the 2nd annual conference in 2006 and it has varied between 250 and 600 attendees since that time
A budget is a quantitative expression of a financial plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities and expenses, liabilities and it expresses strategic plans of business units, activities or events in measurable terms. A budget is the sum of money allocated for a particular purpose, a budget is a quantified financial plan for a forthcoming accounting period. A budget is an important concept in microeconomics, which uses a line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms and it helps to co-ordinate the activities of the organization by compelling managers to examine relationships between their own operation and those of other departments. Other essentials of budget include, To control resources To communicate plans to various responsibility center managers, to motivate managers to strive to achieve budget goals. Tools enable the actual operation of the business to be measured against the forecast.
Lastly, tools establish the cost constraint for a project, program, on the other hand, if the figures diverge wildly from the budget, this sends an out of control signal, and the share price could suffer. Campaign planners incur two types of cost in any campaign, the first is the cost of human resource necessary to plan, the second type of expense that campaign planners incur is the hard cost of the campaign itself. A budget is a tool for an event director to predict with a reasonable accuracy whether the event will result in a profit. A budget can be used as a pricing tool, there are two basic approaches or philosophies, when it comes to budgeting. One approach is telling you on mathematical models, and the other on people, the first school of thought believes that financial models, if properly constructed, can be used to predict the future. The focus is on variables and outputs, investments of time and money are devoted to perfecting these models, which are typically held in some type of financial spreadsheet application.
The other school of thought holds that it’s not about models, no matter how sophisticated models can get, the best information comes from the people in the business. The focus is therefore in engaging the managers in the more fully in the budget process. The companies that adhere to this approach have their managers develop their own budgets, while many companies would say that they do both, in reality the investment of time and money falls squarely in one approach or the other. The budget of a government is a summary or plan of the revenues and expenditures of that government. There are three types of government budget, the operating or current budget, the capital or investment budget, the budget is prepared by the Treasury team led by the Chancellor of the Exchequer and is presented to Parliament by the Chancellor of the Exchequer on Budget Day
Management accounting principles
Another term often used for management accounting principles for these purposes is managerial costing principles. The two management accounting principles are, Principle of Causality and, Principle of Analogy and these two principles serve the management accounting community and its customers – the management of businesses. The above principles are incorporated into the Managerial Costing Conceptual Framework along with concepts and constraints to help govern the management accounting practice, the framework ends decades of confusion surrounding management accounting approaches and techniques and their capabilities. Without foundational principles and accounting professionals have no consistent footing on which to challenge or evaluate new theories of methods for managerial costing, some management accounting methods are designed primarily to serve and comply with financial accountancy guidelines. The importance of having distinct and separate principles exclusively for Management Accounting has received support, prior to 1929 no group – public or private – was issuing or responsible for any accounting standards. S.
Note, Since April 1,2001 the International Accounting Standards Board has been working on developing new international financial reporting standards. S. One of the foundations of a set of Financial Accounting Standards is the creation of a Conceptual Framework that defines the principles upon which the standards will be based, most major national and international accounting standards have developed conceptual frameworks to support their work on setting standards. In contrast, management accounting principles have been overlooked from both a conceptual and a point of view and, for the most part, overshadowed by financial accounting standards. Generally accepted accounting principles applies strictly to financial accounting because it was either the guidance they had at the time. This greatly compromises the management accounting practice and the ability of management accountants to provide managers with relevant decision support, several innovative thinkers, shown in the Timeline below, saw value in management accounting having its own distinct set of principles.
Over the last century it is more and more evident that management accounting principles be viewed as indispensable to the evaluation and improvement of MA methods, the management accounting practice was originally discussed in a series of articles published in The Engineering Magazine. As was typical of early management accounting practice after the industrial revolution, church discussed practices that conveyed the management accounting principles of causality and analogy but never formally defined them. The content of this series was reprinted in The History of Accounting Journal in 1976, studies in the Economics of Overhead Costs. Management Accounting theory developed and was embedded in his cost allocation discussion, Clark stressed the need to consider causes and he was the first to delineate operational cost concepts from decision cost concepts having introduced the concept of avoidability. 1936 to 1954 – Committee on Cost Accounting Concepts and Standards, operating under the direction of the American Accounting Association, CACS had determined to develop accounting principles and standards for all fields of accounting.
The principles accepted would not need to be restrictive, except in the sense that any proper practice restricts departure from it and they should deal more with fundamental methods of expressing accounting facts than with the extent of disclosures in published statements. And … the cost accountant could be effective the further his basic data were from the general ledger. Cost Accounting Principles for External Reporting, A Conceptual Framework, a body of concepts and practices has evolved over the years, gradually becoming what might be referred to as generally accepted cost accounting principles
In economics, cash is money in the physical form of currency, such as banknotes and coins. In bookkeeping and finance, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately. Cash is seen either as a reserve for payments, in case of a structural or incidental negative cash flow or as a way to avoid a downturn on financial markets, the English word cash is derived from the Kannada / Tamil / Malayalam / Telugu word kaasu meaning money. In Southern India the word kaasu/kasa is still used today to refer to money, traders of Persian and European origins, who started trading with the Southern India princely states, used the modified version of the word. This form along with this meaning entered into Latin giving rise to such as capsa “money box” and case eventually passing into Middle French as caisse meaning “money in hand, coin. ”To cash. In a separate development, Venetian merchants started using paper bills, similar marked silver bars were in use in lands where the Venetian merchants had established representative offices.
The Byzantine empire and several states in the Balkan area and Kievan Rus used marked silver bars for large payments and its counterpart in gold was the Venetian ducat. Coin types would compete for markets, by conquering foreign markets, the issuing rulers would enjoy extra income from seigniorage. Successful coin types of high nobility would be copied by lower nobility for seigniorage, imitations were usually of a lower weight, undermining the popularity of the original. Colonial powers sought to take market share from Spain by issuing trade coin equivalents of silver Spanish coins. In the early part of the 17th century, English East India Company coins were minted in England, in England over time the word ‘Cash’ was adopted from Sanskrit कर्ष karsa, a weight of gold or silver but akin to Old Persian
Accounting or accountancy is the measurement and communication of financial information about economic entities such as businesses and corporations. The modern field was established by the Italian mathematician Luca Pacioli in 1494, practitioners of accounting are known as accountants. The terms accounting and financial reporting are often used as synonyms, Accounting can be divided into several fields including financial accounting, management accounting, external auditing, and tax accounting. Accounting information systems are designed to support accounting functions and related activities, Accounting is facilitated by accounting organizations such as standard-setters, accounting firms and professional bodies. Financial statements are audited by accounting firms, and are prepared in accordance with generally accepted accounting principles. GAAP is set by various standard-setting organizations such as the Financial Accounting Standards Board in the United States, as of 2012, all major economies have plans to converge towards or adopt the International Financial Reporting Standards.
The history of accounting is thousands of old and can be traced to ancient civilizations. By the time of the Emperor Augustus, the Roman government had access to detailed financial information, double-entry bookkeeping developed in medieval Europe, and accounting split into financial accounting and management accounting with the development of joint-stock companies. The first work on a double-entry bookkeeping system was published in Italy, both the words accounting and accountancy were in use in Great Britain by the mid-1800s, and are derived from the words accompting and accountantship used in the 18th century. In Middle English the verb to account had the form accounten, which was derived from the Old French word aconter, which is in turn related to the Vulgar Latin word computare, meaning to reckon. The base of computare is putare, which meant to prune, to purify, to correct an account, hence, to count or calculate. The word accountant is derived from the French word compter, which is derived from the Italian.
Accountancy refers to the occupation or profession of an accountant, particularly in British English, Accounting has several subfields or subject areas, including financial accounting, management accounting, auditing and accounting information systems. Financial accounting focuses on the reporting of a financial information to external users of the information, such as investors. It calculates and records business transactions and prepares financial statements for the users in accordance with generally accepted accounting principles. GAAP, in turn, arises from the agreement between accounting theory and practice, and change over time to meet the needs of decision-makers. This branch of accounting is studied as part of the exams for qualifying as an actuary. It is interesting to note that two professionals and actuaries, have created a culture of being archrivals
Fund accounting is an accounting system for recording resources whose use has been limited by the donor, grant authority, governing agency, or other individuals or organisations or by law. It therefore emphasizing accountability rather than profitability and is used by Nonprofit organizations, investment accounting, however, is a different system, unrelated to government and nonprofit fund accounting. Nonprofit organizations and government agencies have special requirements to show, in statements and reports, how money is spent. Unlike profit oriented businesses, which use a set of self-balancing accounts, nonprofits can have more than one general ledger. Fund accounting distinguishes between two classes of fund. Those funds that have a use, that can be spent for any purposes by the organisation. The reason for the restriction can be for a number of different reasons, examples include legal requirements, where the moneys can only be lawfully used for a specific purpose, or a restriction imposed by the donor or provider.
These donor/provider restrictions are usually communicated in writing and may be found in the terms of an agreement, government grant and this provides an audit trail that all moneys have been spent for their intended purpose and thereby released from the restriction. An example may be a school system in the United States. Each of these programs has its own unique reporting requirements, so the system needs a method to separately identify the related revenues and expenditures. This is done by establishing separate funds, each with its own chart of accounts, Nonprofit organizations will use a minimum of two categories and unrestricted funds. However, as the organisation grows larger they may find they have to increase the number depending on restrictions and reporting requirements by donors and fund providers. Designated fund - assets which has assigned to a specific purpose by the organisations governing board but are still unrestricted as the board can cancel the desired use. Trading funds - many large non-profit organisations now have shops and other outlets where they raise funds from selling goods, the profits from these are used for the purpose of the organisations.
Plant fund Some organisations hold there non-current assets and related liabilities, is a fund from the current assets. These may include charitable gift annuities or life income funds, agency or Custodian funds are held to account for resources before they are disbursed according to the donors instructions. The organisation has little or no discretion over the use of these resources, current funds – restricted use current assets subject to restrictions assigned by donors or grantors. Like Profit making organisations and governments will produce Consolidated Financial Statements, if the organisation is small it may use a cash basis accounting but larger ones generally use accrual basis accounting for their funds
It attempts to ensure that the books of accounts are properly maintained by the concern as required by law. Auditing has become such a phenomenon in the corporate and the public sector that academics started identifying an Audit Society. Any subject matter may be audited, Audits provide third party assurance to various stakeholders that the subject matter is free from material misstatement. The term is most frequently applied to audits of the information relating to a legal person. Other areas which are commonly audited include, secretarial & compliance audit, internal controls, quality management, project management, water management, and energy conservation. As a result of an audit, stakeholders may effectively evaluate and improve the effectiveness of management, control. The word audit is derived from a Latin word audire which means to hear, an information technology audit, or information systems audit, is an examination of the management controls within an Information technology infrastructure.
These reviews may be performed in conjunction with a financial statement audit, internal audit, due to strong incentives to misstate financial information, auditing has become a legal requirement for many entities who have the power to exploit financial information for personal gain. Traditionally, audits were mainly associated with gaining information about financial systems, financial audits are performed to ascertain the validity and reliability of information, as well as to provide an assessment of a systems internal control. As a result of this, a party can express an opinion of the person / organisation / system in question. The opinion given on financial statements will depends on the evidence obtained. Due to constraints, an audit seeks to provide reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits, but recently, the argument that auditing should go beyond just true and fair is gaining momentum. And the US Public Company Accounting Oversight Board has come out with a release on the same.
Cost accounting is a process for verifying the cost of manufacturing or producing of any article, on the basis of measuring the use of material. In simple words, the term, cost audit means a systematic and accurate verification of the cost accounts and records, in most nations, an audit must adhere to generally accepted standards established by governing bodies. There are new types of integrated auditing becoming available that use unified compliance material and this is a very new but necessary approach in some sectors to ensure that all the necessary governance requirements can be met without duplicating effort from both audit and audit hosting resources. The purpose of an assessment is to something or calculate a value for it
An income statement or profit and loss account is one of the financial statements of a company and shows the company’s revenues and expenses during a particular period. It indicates how the revenues are transformed into the net income and it displays the revenues recognized for a specific period, and the cost and expenses charged against these revenues, including write-offs and taxes. The purpose of the statement is to show managers and investors whether the company made or lost money during the period being reported. One important thing to remember about a statement is that it represents a period of time like the cash flow statement. This contrasts with the sheet, which represents a single moment in time. Charitable organizations that are required to publish financial statements do not produce an income statement, they produce a similar statement that reflects funding sources compared against program expenses, administrative costs, and other operating commitments. This statement is referred to as the statement of activities.
Revenues and expenses are further categorized in the statement of activities by the restrictions on the funds received and expended. The income statement can be prepared in one of two methods, the Single Step income statement takes the simpler approach, totaling revenues and subtracting expenses to find the bottom line. The more complex Multi-Step income statement takes several steps to find the bottom line and it calculates operating expenses and, when deducted from the gross profit, yields income from operations. Adding to income from operations is the difference of other revenues, when combined with income from operations, this yields income before taxes. The final step is to deduct taxes, which produces the net income for the period measured. However, information of a statement has several limitations, Items that might be relevant. Some numbers depend on accounting methods used, some numbers depend on judgments and estimates. S. Names and usage of different accounts in the income statement depend on the type of organization, industry practices and it is usually presented as sales minus sales discounts and allowances.
Every time a business sells a product or performs a service and this often is referred to as gross revenue or sales revenue. Cost of Goods Sold / Cost of Sales - represents the direct costs attributable to goods produced and it includes material costs, direct labour, and overhead costs, and excludes operating costs such as selling, advertising or R&D, etc. Selling and Administrative expenses - consist of the combined payroll costs, SGA is usually understood as a major portion of non-production related costs, in contrast to production costs such as direct labour
Liability (financial accounting)
Liabilities in financial accounting need not be legally enforceable, but can be based on equitable obligations or constructive obligations. An equitable obligation is a duty based on ethical or moral considerations, a constructive obligation is an obligation that is implied by a set of circumstances in a particular situation, as opposed to a contractually based obligation. The accounting equation relates assets and owners equity, probably the most accepted accounting definition of liability is the one used by the International Accounting Standards Board. The following is a quotation from IFRS Framework, Regulations as to the recognition of liabilities are different all over the world, examples of types of liabilities include, money owing on a loan, money owing on a mortgage, or an IOU. Liabilities are debts and obligations of the business they represent as creditors claim on business assets and they usually include payables such as wages, accounts and accounts payable, unearned revenue when adjusting entries, portions of long-term bonds to be paid this year, short-term obligations.
Long-term liabilities — these liabilities are reasonably expected not to be liquidated within a year and they usually include issued long-term bonds, notes payables, long-term leases, pension obligations, and long-term product warranties. Liabilities of uncertain value or timing are called provisions, when a company deposits cash with a bank, the bank records a liability on its balance sheet, representing the obligation to repay the depositor, usually on demand. Simultaneously, in accordance with the principle, the bank records the cash, itself. The company, on the hand, upon depositing the cash with the bank, records a decrease in its cash. A debit either increases an asset or decreases a liability, a credit either decreases an asset or increases a liability, according to the principle of double-entry, every financial transaction corresponds to both a debit and a credit. When cash is deposited in a bank, the bank is said to debit its cash account, on the asset side, in this case, the bank is debiting an asset and crediting a liability, which means that both increase.
When cash is withdrawn from a bank, the opposite happens, in this case, the bank is crediting an asset and debiting a liability, which means that both decrease
Financial statements is a formal record of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a manner and in a form easy to understand. A profit and loss statement provides information on the operation of the enterprise and these include sales and the various expenses incurred during the stated period. A Statement of changes in equity, known as equity statement or statement of retained earnings, a cash flow statement reports on a companys cash flow activities, particularly its operating and financing activities. For large corporations, these statements may be complex and may include a set of footnotes to the financial statements and management discussion. The notes typically describe each item on the sheet, income statement. Notes to financial statements are considered a part of the financial statements. Financial statements should be understandable, relevant and comparable, reported assets, equity and expenses are directly related to an organizations financial position.
Financial statements may be used by users for different purposes and managers require financial statements to make important business decisions that affect its continued operations, Financial analysis is performed on these statements to provide management with a more detailed understanding of the figures. These statements are used as part of managements annual report to the stockholders. Prospective investors make use of statements to assess the viability of investing in a business. Financial analyses are used by investors and are prepared by professionals. Financial institutions use them to decide whether to grant a company with fresh working capital or extend debt securities to finance expansion, the rules for the recording and presentation of government financial statements may be different from those required for business and even for non-profit organizations. They may use either of two accounting methods, accrual accounting, or cost accounting, or a combination of the two, a complete set of chart of accounts is used that is substantially different from the chart of a profit-oriented business.
Personal financial statements may be required from persons applying for a loan or financial aid. Typically, a financial statement consists of a single form for reporting personally held assets and liabilities, or personal sources of income and expenses. The form to be filled out is determined by the organization supplying the loan or aid, although laws differ from country to country, an audit of the financial statements of a public company is usually required for investment and tax purposes. These are usually performed by independent accountants or auditing firms, results of the audit are summarized in an audit report that either provide an unqualified opinion on the financial statements or qualifications as to its fairness and accuracy