Sometimes the auditor, completing the audit in appropriate circumstances, remains dissatisfied with the financial condition of the enterprise or discovers other reasons, called a high risk of business insolvency of the economic entity. These circumstances are regulated in detail in PS AD Applicability of the going concern assumption. However, in ch. 4 it is proven that this risk (most often at an acceptable level) always exists due to various subjective and objective reasons. But sometimes in the cases studied here, its level becomes not only significant, but also decisive, and in these cases the identified circumstances have a direct connection with the concepts of a going concern in an audit, the direct opposite of which can be considered the liquidation concept.
The need for depth also arises when there are signs of financial instability and an audit of the annual accounting (financial) statements. Analysis of financial condition includes.
The need for self-control over the financial and economic activities of an enterprise objectively follows from the requirements determined by the principles of self-sufficiency and self-financing. Self-control at the enterprise is carried out by the financial division of the administrative and managerial apparatus (if the enterprise is a joint-stock company, control is carried out by its audit commission). Self-control (or internal audit) is based on an analysis of the financial condition of the enterprise, identifying factors and conditions that improve its financial position, developing measures to overcome negative aspects, using reserves to increase profitability, etc.
An unconditional conclusion means that the management of the enterprise deserves the highest rating for a reliable reflection of the financial condition and results of operations. If the auditor found the report to comply with current requirements, then for the analyst it is - good recommendation. However, an audit does not guarantee that the data will be accurately reflected. Although many regulatory authorities strive to ensure that financial information is reliable, financial reporting requires caution.
Tax audit of transactions with fixed assets and intangible assets. At enterprises that have not passed an audit, the risk of violations of accounting and tax laws increases, resulting in a decrease in the receipt of tax payments to budgets of various levels and a deterioration in financial condition. In addition, the lack of an audit report for enterprises and organizations subject to mandatory annual audits makes it difficult and sometimes even prevents these economic entities from entering the international financial market.
XX century American audit began to develop independently, as United States entrepreneurs recognized the impossibility of applying the goals and approaches of English audit to the peculiarities of their business. The first works on American audit characterize the change in goals as follows: detection and prevention of intentional errors; detection and prevention of unintentional errors. Later, due to significant changes in supply and demand, the goals of the audit became to establish the actual financial condition and profitability of the enterprise and prevent intentional and unintentional errors (as a secondary goal).
AUDIT - study, analysis, control of the financial status of enterprises, organizations, firms, their income and expenses, profits and development of advice on improving business activities. This analysis is performed by qualified specialists in the field of accounting and finance, called auditors. Sometimes an auditor is invited to a company by its managers to check how successfully the company is running its business in order to find out how to improve its work. It happens that auditors are sent by government control bodies for an audit if there is a suspicion that a company is violating laws in its financial activities and accounting.
One of the areas of operational audit is the audit of a crisis enterprise. The purpose of such an audit is to analyze the management mechanism and various aspects of the financial and economic activities of the enterprise and, on this basis, develop a program for overcoming the crisis through reform or restructuring. The specific goals of the audit may be to bring the enterprise out of bankruptcy to a break-even level, to achieve a financial condition that satisfies the requirements of creditors, and to maximize the income of shareholders (founders). Based on this, it is possible to formulate tasks, the solution of which determines the content of the main stages of the audit of a crisis enterprise
In the future, in Russia, instructions for the financial analysis of enterprises should be developed, publicly discussed and recommended to auditors. Such software backlogs tied to various systems accounting information processing already exist and are being developed. The state and issues of computerization of accounting and auditing, the use of expert systems in auditing, as well as the accumulated experience of creating and using computer audit programs to check balances, as well as the problems of developing methods of documentary control using computers, are increasingly covered in the specialized literature.
The magazine "Expert" began publishing consolidated analytical reviews of the financial condition of individual (audited by reputable domestic and foreign audit firms) enterprises that are considered quite indicative of the relevant industries (for example, RAO Energy and Electrification "UES of Russia", JSC Trading house"GUM", JSC intercity and international electrical communications "Rostelecom"). These reviews also contain information on Price (shares)/earnings ratios, but in addition to this they also contain information on market capitalization. balance sheet profit, number of shares, etc., which makes it possible to evaluate other multipliers discussed above.
According to the preliminary examination of internal control at the audited enterprise, it was established that the audit will take 12 days. The auditor concluded that Special attention It will be necessary to pay attention to the study of constituent documents, checking the correctness of the balance sheet and financial results statement, examining the correctness of attributing costs to the cost of production, the procedure for generating and using profits. In addition, familiarization with the state of the accounting system showed the advisability of checking the procedure for conducting cash and settlement transactions, the movement of material assets, the calculation and payment of wages, studying the correctness of calculation and timely payment of taxes, fees, deductions and mandatory payments to the budget and to extra-budgetary funds for the study of settlements with debtors and creditors.
An audit, as is known, refers to the work of financial analysis, accounting control, conducting audits of all financial and economic activities of an enterprise, organizations, carried out by independent services specializing in this type of activity (audit firms, auditors). Such work is carried out on the basis of a client’s request within the framework of the relevant agreement, as well as at the request of government authorities and contractors. The main purpose of the audit is to compile a comprehensive objective assessment of the state of finances of the audited company, identify shortcomings, omissions, deviations from established by law standards and, on this basis, developing constructive proposals to improve the economic situation of the client enterprise. Data for analysis is used mainly from financial statements. Thus, the scope of the audit includes, first of all, the collection of real factual materials, their comprehensive assessment, analysis and systematization, bringing all financial documentation into compliance with established standards. Hence the audit comes out important factor successful business development, search and practical implementation of a system of measures that will allow the enterprise to overcome a crisis situation, which is especially typical for Russia today.
The denationalization of the energy sector, its privatization with the formation of individual enterprises as market subjects and the establishment of market relations have posed many new challenges. Among them is an assessment of the condition of energy enterprises. This is an audit - economic, financial, technical, etc. The purpose of assessing the condition is very broad, from resolving issues of modernization, reconstruction, dismantling of equipment, developing a repair policy to valuing an enterprise on the stock market.
In this regard, the question arises about the justification of the objects and areas of audit activity. First of all, when the objects of audit activity are determined, the task arises of clearly determining whether the object of audit activity is the accounting financial statements and the information that is reflected in the documentation about the activities of the enterprise, or the object of the audit is the production and economic activity itself. This question is very fundamental, because if we focus on the first definition, then audit refers, first of all, to a documentary form of verification, in which it may be necessary to go directly to objects, i.e. the use of certain methods of actual control, for example, conducting an inventory, control measurements, etc. If the object is production and economic activity, then the question is immediately raised that it is necessary, first of all, to carry out physical control of the condition of this business entity. This issue is extremely important. At the same time, the question should be raised about what should be the object of verification even with a documented audit concept. First, you should find out what information you need to request. It is quite obvious that during the audit all document flow data of the enterprise are used, because in order to assess the correctness of accounting, we must talk not only about its compliance with the requirements of regulatory legal acts, but also raise the question of the compliance of accounting with the requirements
During the transformation of the economy, not only social illusions collapsed. The hope that private property would automatically improve the efficiency of the real sector did not materialize. It became clear that having it does not mean using it correctly. The old myth has returned. They started talking about nationalization and government officials as agents of order and public interest in economics. A business executive - an administrator who has gained market experience - began to claim the place of the entrepreneur as the main figure. Private entrepreneur - not the only person market system. He is surrounded by a constellation of other key figures. This is the shareholder and manager, who need to be provided with a whole range of diverse tools that discipline the behavior of enterprises in a market environment (audit, financial markets, options, etc.). The presence of these other components makes market system mature, and the behavior of the entrepreneur is civilized. Practice shows that the owner is able to carry out effective transformations in real sector only if his ally is a manager. This happens at YUKOS enterprises, in Tyumen oil company(TNK), KomiTEK, at Uralmash, Novolipetsk plant, etc.
Task description. Evaluating company XXX received an order from an investor to determine the real market value as of January 1, 1997 of a 100% ownership interest in the trading and export company U, operating in the timber processing industry and located at M., N region, street X, house X. During the assessment, information was used on the financial position of the enterprise from January 1994 to 1997. The financial documentation was audited by the Audit Consulting company. The assessment used the company's contracts and agreements, as well as information about similar companies in Russia. It was assumed that no events had occurred since the last information was received that could significantly change the market value of the enterprise.
The word audit comes from the Latin audio, which means he hears, listener. This emphasizes the special trust in the auditor’s relationship with his clients, attentiveness, goodwill, compassion, and interest in the affairs of the client who has applied for the services of the auditor. The auditor's task is to check the financial status of the financial situation by spending funds
Introduction
2. Audit and analysis of the financial condition of an enterprise using the example of Prima LLP
2.3 Analysis of solvency and financial stability of the enterprise Prima LLP
Conclusion
List of sources used
Appendix A - Main indicators of financial and economic activities of Prima LLP for 2007-2008
Appendix B - Agreement for the provision of audit services
Appendix B - Audit Report
Introduction
The formation of auditing activities is associated with the formation of market relations, the privatization of state property, the reform and development of various forms of ownership, including private ones, and the provision of independence in business activities to business entities. In this regard, there is an increasing need for the reliability of accounting and reporting data for a wide range of external and internal consumers of information about business activity enterprises in order to prevent risk when investing their capital and control over their effective use.
Kazakhstan's transition to market relations predetermines the need to create economic institutions that regulate the relationships between different business entities. The audit institute can take a leading place in this process. This is especially important for agriculture, where fundamental changes have taken place.
In this regard, audits at enterprises should be organized and conducted according to such methodological approaches that would ensure the reliability of checks of compliance with the reflection in the accounting registers and reporting of the fixed assets available on the farm, fuel and lubricants, spare parts, raw materials and other materials for the audit period, as well as the reliability product costing and evaluation during processing and sales; determination of financial results; drawing up accurate, complete and timely reporting in the accounting and reporting of business facts, obtaining evidence to confirm it and conveying this truth through the audit conclusion to users of information.
In the situation that has developed at enterprises and the Kazakh economy as a whole, the most pressing issue is the audit of the financial condition of the enterprise. Since carrying out this analysis can reveal the strengths and weaknesses of the enterprise and suggest the choice of making the most rational management decision. This will save the enterprise from bankruptcy, increase the independence, liquidity of the enterprise, etc. depending on the current situation on the farm.
The purpose of the course work is to study the methodology for auditing the financial condition of an enterprise.
The objectives of the course work are:
Consider the theoretical foundations and legal framework for regulating auditing activities;
Consider the methodology for auditing the financial condition of an enterprise;
The subject of the course work is the content and basic procedures for auditing the financial condition of an enterprise, the object of study is the financial condition of Prima LLP.
1. Theoretical aspects of auditing the financial condition of an enterprise
1.1 Theoretical foundations and legal framework for regulating auditing activities
According to the Law of Kazakhstan “On Auditing Activities” dated November 20, 1998, an audit is an examination of public accounting statements, accounting, primary documents and other information regarding the financial and economic activities of business entities in order to determine the reliability of their reporting, accounting, its completeness and compliance with the current legislation and established standards.
The concept of auditing is broader and provides for the practical implementation of both audit and other audit services in the form of related examinations, consultations on accounting, reporting, taxation, analysis of financial and economic activities and other types of economic and legal support for business activities of individuals and legal entities.
The subject of audit activity is the process of expanded reproduction of a socially necessary product and compliance with its economic and legal regulation in the conditions market economy.
The objects of the audit are accounting, reliability of reporting, financial stability, solvency, enterprise management system, quality of work of economic and technical services, taxation, planning, regulation, incentives, on-farm control, organization and technology of production, processes of economic activity, design and estimate documentation , executive discipline, etc.
The International Federation of Accountants, together with the International Committee on Auditing Practices, has developed auditing standards in the amount of 29 basic standards and 4 related works.
The Audit Chamber of Kazakhstan (ACK) is an independent independent body whose goal is to promote the development, improvement and unification of auditing in the country.
The powers of the Audit Chamber of Kazakhstan are determined by the Law of Kazakhstan “On Auditing Activities” and the Charter of the AIC adopted on June 1-2, October 1993.
In order to regulate the rules and procedures for conducting audits and performing audit services, the AIC has developed national audit standards (standards). They are based on the legislation of Kazakhstan on auditing activities and international auditing standards.
Auditing standards formulate uniform basic requirements that define regulatory requirements regarding the quality and reliability of the audit and provide a certain level of assurance of the audit results if they are met.
The significance of the standards is that they:
Ensure high quality audits;
Provide assistance in introducing new scientific achievements into audit practice;
Help users understand the audit process;
Create a public image of the profession;
Provide connection between individual elements of the audit process.
1.2 Audit of financial and property status
An audit of financial and property status consists of a general assessment of changes in financial indicators for the reporting period through horizontal and vertical analysis of the balance sheet.
At the same time, indicators of balance sheet dynamics or horizontal analysis make it possible to establish their absolute deviation and growth rates at the end of the year compared to the beginning.
In turn, indicators of the balance sheet structure or vertical analysis make it possible to determine the proportion of items and sections of the balance sheet in its overall total.
Analysis of the property status of an enterprise is characterized by such coefficients as: depreciation, renewal, growth and disposal rates.
The depreciation rate characterizes the part of the cost of fixed assets that is written off as production costs in previous periods. The increasing trend indicates an increase in the depreciation of fixed assets and is a negative factor.
The coefficient of renewal of fixed assets characterizes the intensity of the introduction of new fixed assets into the enterprise. A decrease in the indicator indicates that the company has begun to introduce less new fixed assets into production (negative trend). If the renewal rate increases over time, then this is a positive trend.
The retirement ratio shows the rate of attrition of fixed assets, that is, the degree of attrition of these fixed assets, which are either obsolete, or worn out and unsuitable for further use.
It is also important that the retirement rate be less than the renewal rate. This situation indicates the presence of a normal investment policy at the enterprise.
The growth rate of fixed assets characterizes the level of increase in fixed assets. An increase in the indicator indicates a positive trend.
1.3 Audit of solvency and financial stability
Solvency is the ability of an enterprise, over a certain period of time, to fulfill obligations to creditors that arise as a result of its financial and economic activities.
Solvency reflects the ability of an enterprise to pay off short-term current obligations with its easily realizable assets.
The means of payment must be greater than or equal to current liabilities, that is, if the solvency ratio is greater than or equal to 1, then the enterprise is solvent.
The analysis of financial ratios is based on calculating the relationships between various absolute indicators of the financial activity of an enterprise.
The most widespread are the following groups of financial ratios.
Coefficients for assessing the financial stability of an enterprise. The coefficients of this group make it possible to identify the level of financial risk associated with the structure of the sources of formation of the enterprise’s capital, and, accordingly, the degree of its financial stability in the process of upcoming development. To carry out such an assessment, the following key indicators are used in the process of financial analysis:
a) Agility coefficient (AC). It shows to what extent the volume of assets used by the enterprise is formed from its own capital and how independent it is from external sources of financing. This indicator is calculated using the following formula:
KA=SK/K=1P/B,
where SK is the amount of the enterprise’s own capital as of a certain date, K is the total amount of the enterprise’s capital as of a certain date. The higher the value of this ratio, the more financially sound, stable and more independent the enterprise is from external creditors. The critical value of the financial stability coefficient is 0.5.
b) Financial risk coefficient (FR). It characterizes the volume of attracted borrowed money per unit of equity capital, i.e. the degree of dependence of the enterprise on external sources of financing. To calculate this indicator, the following formula is used:
KF = ZK / SK = 2P + ZP + 4P + 5P / 1P,
This ratio provides the most complete assessment of financial stability. Calculation of the indicator over time indicates an increased dependence of the enterprise on external investors and creditors, i.e., a decrease in financial stability and vice versa. The optimal value of this coefficient is less than 0.5, the critical value is 1.
c) Equity capital agility ratio (CM). The ratio must be high enough to provide flexibility in the use of the enterprise’s own funds:
KM=SOS/SK =1P-1A/1P
To determine the optimal value of the agility coefficient, it is necessary to compare this indicator for a specific enterprise with the average indicator for the industry or competitors.
d) Long-term financial independence coefficient (LFC). It shows to what extent the total volume of assets used is formed from the enterprise’s own and long-term borrowed capital, i.e., it characterizes the degree of its independence from short-term borrowed sources of financing. This indicator is calculated using the formula: KDN = SK + ZKd / A = 1P + ZP / B
1.4 Analysis of balance sheet liquidity
Asset liquidity is the ability of individual elements of assets to be transformed into cash. For the assessment, a form of financial reporting is used - the balance sheet, where asset items are placed according to the principle of increasing liquidity from top to bottom.
Liquidity assessment ratios characterize the ability of an enterprise to timely pay for its current financial obligations at the expense of current assets of varying levels of liquidity. Carrying out such an assessment requires a preliminary grouping of the company’s current assets by liquidity level.
The degree of liquidity is the rate at which an enterprise’s assets are converted into cash.
The most liquid assets include all the company's cash and current financial investments (A1).
Quickly selling assets. Assets that require a longer time to convert into cash: finished products, goods, accounts receivable, bills of exchange (A2).
Slowly selling assets. A much longer period will be needed to transform inventories and costs in work in progress into finished products, and then into cash. In addition, this group includes deferred expenses, as well as current assets not included in the first two groups (AZ).
Hard to sell assets. These include non-current assets of the enterprise, the value of which is reflected in the first asset section of the balance sheet (A4).
Liabilities are grouped according to the degree of maturity:
Most urgent obligations. These usually include accounts payable for purchased goods, works, and services (P1).
Short-term liabilities. Short-term borrowed funds, current settlement obligations and other current liabilities (P2).
Long-term liabilities. They are represented by long-term liabilities of the enterprise, reflected in section 3 of the liability side of the balance sheet, as well as articles 2 and 5 of sections of the liability side of the balance sheet, not classified in the second group (P3).
Permanent (stable) liabilities are items in the 1st liability section of the balance sheet.
To assess liquidity in the process of financial analysis, the following main indicators are used:
a) Absolute liquidity ratio (ALR). It shows the extent to which all current financial obligations of the enterprise are secured by the ready means of payment available to it on a certain date. In countries with transition economies, its optimal value is recognized at the level of 0.2-0.35. A value above 0.35 is not always required, since excess funds indicate their ineffective use. This coefficient is calculated using the formula:
KAP=L1/P1 +P2
b) Coefficient current liquidity shows the extent to which existing current assets are sufficient to meet current liabilities. The logic behind calculating this ratio is that current assets must be fully converted into cash within one year, and current liabilities must also be paid within a year.
According to generally accepted standards, it is believed that this coefficient should be in the range from one to two. The lower limit is due to the fact that working capital must be at least sufficient to pay off short-term obligations, otherwise the company is in danger of bankruptcy. An excess of short-term funds over liabilities by more than two (three) times is also considered undesirable, since it may indicate a violation of the capital structure. When analyzing the coefficient, special attention should be paid to its dynamics.
Using the classification of assets and liabilities given above, the formula for determining the total liquidity ratio can be presented as follows:
KTL =A1 +A2 +AZ / P1 +P2
c) the quick liquidity ratio is considered a more stringent test of liquidity, since its calculation does not take into account the least liquid part of current assets - slowly selling assets (LZ). There are two main reasons why slow-moving assets are not used in calculating this ratio:
The net realizable value of such assets upon forced sale is much less than the value at which the assets are recorded on the balance sheet;
If a company sells its inventory (namely, they often dominate this group of assets), then the question arises of how it will continue to operate. This coefficient is calculated using the form:
KSL=A1+A2/P1+P2
It is desirable that this coefficient be about 1.5. However, in our conditions, its value equal to 0.7-0.8 is considered sufficient.
2. Audit and analysis of the financial condition of an enterprise using the example of PRIMA LLP
2.1 Brief description of the enterprise
Prima LLP was registered with the Department of Justice of the Pavlodar region on 12/05/2001, certificate No. 9919-1945 LLP. The type of property is private.
Prima LLP is a legal entity and is guided in its activities by the legislation of the Republic of Kazakhstan, as well as the provisions of the Charter.
The main activity is flour milling and processing, purchasing, storage, processing and sale of agricultural products.
The Partnership has the right to carry out other types of activities:
Bakery production and sale of bread and cotton products;
Wholesale trade of consumer goods;
Purchase and sale of fuels and lubricants and other petroleum products;
Growing and production of grain, grass and other crops, their processing and sale;
Creation of a sales network in the form of stores;
Technical, organizational, transport, maintenance and operational services, including purchase and supply, sales, installation, installation, development, production, implementation, operation, repair, maintenance of machines, mechanisms, instruments, equipment, software, systems, incl. h. security and other equipment;
Organization of parking lots and vehicle maintenance;
Representation, information and advisory services;
Other services that are profitable or necessary for the activities of the Partnership and do not contradict the current legislation of the Republic of Kazakhstan.
Other types of activities are not prohibited by law.
Prima LLP has a current account:
- No. 023467065 in the PF of OJSC "People's Bank" BIC 193201601;
currency accounts:
- No. 201070258 in the PF of OJSC "People's Bank" USD;
- No. 358160736 in the PF of OJSC "People's Bank" KZ;
He is registered as a taxpayer with budgetary and extra-budgetary funds in Pavlodar.
The governing bodies of the LLP are: the director and his deputies.
The person authorized to perform managerial functions is: the director.
The person authorized to conduct accounting is: the chief accountant, who heads the accounting department.
According to the Law “On Accounting” and SBU-1, the manager is responsible for:
Selection of a specialist for the position of chief accountant;
Organization of the accounting system, reporting, tax accounting, as well as the adoption of the Accounting Policy.
2.2 Analysis of the financial and property status of Prima LLP
Table 1 Analysis of the composition and structure of assets for Prima LLP for 2008
| At the beginning of the year | At the end of the year | Change +- | % increase|||
| Assets at the beginning of the year | ||||||
| Current (6.1%): | Long-term (93.9%): | |||||
|
|
||||||
| Assets at the end of the year | ||||||
| Current (19.6%): |
Long-term (80.4%): |
|||||
|
Calculation formula |
||||||
|
Kros=OSo/VB=>0.5 |
||||||
| Ki=NI/OSP<=0,5 | 0,05 0,05 0||||||
| Fo=Dr/OSo | 0,2 0,3 +0,1||||||
| Fe=OSo/Dr | 4,5 3,9 -0,6||||||
| (DS+KFI)/TA*100% | 4,5 39,8 +35,3||||||
| totalTA/totalYES | 0,06 0,2 +0,14||||||
Conclusion: Analysis of the property status of Prima LLP showed that the value of the property by the end of the year increased by 51283.1 thousand tenge or 10.3%, this indicates the positive work of the enterprise. The increase in property was caused primarily by a significant increase in current assets by 13.5%, which totaled 77,081 thousand tenge, but it should be noted that the value of long-term assets decreased significantly by the same 13.5%, which totaled 25,797. 9 thousand tenge.
An analysis of the placement efficiency showed that at the beginning of the year, long-term assets exceeded current assets by 0.06 times, and at the end of the year by 0.2 times, which does not exceed regulatory limits. This is explained by the fact that the share of long-term assets in the property of the enterprise, both at the beginning and at the end of the year, was the largest share - 93.9% and 80.4%, respectively, and current assets only 6.1% and 19.6% respectively.
In the composition of long-term assets at the end of the year, there was a decrease in all items in terms of amount, especially in unfinished capital construction, which confirms the company’s policy of expanding its production capacity. However, the decrease in depreciation on fixed assets indicates that the company devoted all its efforts to expanding production and, with a lack of funds, most likely sold its fixed assets to complete the construction project. An assessment of the efficiency of use of fixed assets showed a fairly low level of capital productivity, namely, each tenge invested in fixed assets gives a return in the form of manufactured products in the amount of 0.2 tenge at the beginning of the year and 0.3 tenge at the end of the year. those. to produce products worth 1 tenge, it is necessary to invest 4.5 and 3.9 tenge of assets in fixed assets. Maintaining such a policy in the future may lead the enterprise to bankruptcy. This is confirmed by the analysis of current assets. Current assets of a solvent enterprise usually occupy the largest share in the assets of the enterprise, but in this situation this is not the case. Current assets, both at the beginning of the year and at the end, occupy the smallest share in the assets of the enterprise; this alone already indicates that the enterprise does not rationally allocate assets between current and non-current assets. Accounts receivable increased sharply, the growth rate amounted to 571.2% or in the amount of 41,010 thousand tenge. on the one hand, it indicates that buyers of the enterprise’s products are delaying their payments, on the other hand, it indicates upcoming funds, and if the enterprise has solvent debtors, then it is guaranteed financial well-being.
The share of TMZ sharply decreased by 5241.9 thousand tenge, the growth rate decreased by -24.2%, which may indicate problems with the supply of raw materials and supplies, or the enterprise’s intention to reduce and cease its activities.
The share of cash from 0.3% to 7.8% and the growth rate was 3064.1%. On the one hand, it reflects an increase in the solvency of the enterprise, and on the other hand, it indicates the formation of free funds unused in circulation, which can, in conditions of high inflation, lead to their depreciation. An increase in cash helps to increase the mobility ratio of current assets, i.e. assets actually ready to pay urgent payments. The calculation of this coefficient showed that the changes that occurred in the composition of T.A. allowed to significantly increase the mobile portion of assets by 35.3%.
Table 2 Analysis of the composition and structure of sources of formation of economic assets for Prima LLP for 2008.
| At the beginning of the year | At the end of the year | Change +- | % increase|||
Conclusion: the receipt, acquisition and creation of property of an enterprise can be carried out at the expense of own and borrowed capital, the ratio of which determines its financial stability. The capital of an enterprise is grouped into 2 groups according to ownership:
Equity capital (SK);
Debt capital (LC): long-term liabilities and current liabilities.
An analysis of the sources of asset formation showed that their total value by the end of the year increased significantly by 10.3% or by 51283.1 thousand tenge, this indicates that the enterprise by the end of the year allocated more funds to financing and creating property.
The increase in the total share of liabilities was caused primarily by a sharp increase in long-term borrowings by 34.9%, which amounted to 78,179 thousand tenge, but it should be noted that by the end of the year the value of current liabilities decreased by 22.7% or by the amount 14155.8 thousand tenge, which is generally assessed positively and means that the enterprise has enough of its own working capital to finance business activities.
There were also changes in equity capital at the end of the year; it decreased by 6.1% or in the amount of 12,740.1 thousand tenge. The decrease in the amount of equity capital occurred due to a decrease in the item “Retained income (loss)” by exactly this 6.1% and 12,740.1 thousand tenge.
An analysis of the structure of sources showed that both at the beginning and at the end of the year the enterprise does not have financial autonomy, since the share of equity capital in the balance sheet currency was only 42.3% at the beginning of the year, and at the end of the year this figure decreased and amounted to 36%. , this indicates that for every tenge of equity capital invested in the assets of the enterprise, 1.4 borrowed funds were borrowed at the beginning of the year, and 1.8 at the end of the year, and this indicates that the enterprise’s dependence on its creditors is increasing.
2.3 Analysis of solvency and financial stability of the enterprise Prima LLP
Table 3 Analysis of the current solvency of Prima LLP for 2008
Current solvency ratio:
Kt/s = amount of means of payment / amount of short-term current liabilities >1.
Kt/sN=1348.3/62284.6=0.02
Kt/sK=42661.2/44824.6=0.95
Kt/s=0.95-0.02=+0.93
Conclusion: Analysis of solvency showed that the company was absolutely not solvent at the beginning of the year, had almost no ability to pay its payments, except for 2% of payments, but at the end of the year this situation changed in a positive direction and the company could pay 93% of its payments.
The reasons for the insolvency of an enterprise can be different, such as:
Failure to fulfill the production and sales plan;
Lack of own funds for financing as a result of failure to meet the income plan;
Increase in production costs;
High percentage of taxation;
Unjustified diversion of funds into accounts receivable;
Unjustified investment in production reserves in excess of the demand for them.
2.4 Analysis of the liquidity of the balance sheet of Prima LLP
Table 4 Analysis of balance sheet liquidity for Prima LLP for 2008
| Payment surplus-+; flaw | |
Balance Sheet Liquidity Equation
at the beginning of the year at the end of the year
A1< П1 А1 < П1
A2 > P2 A2 > P2
A3< П3 А3 < П3
A4 > P4 A4 > P4
The balance sheet liquidity equation for Prima LLP showed that at the beginning and end of the year, the enterprise in the next three months is not expected to receive funds to pay the most urgent payments, but, however, in the next period from 3 to 6 months, the enterprise will be able to pay off the most urgent and short-term liabilities, the company will not be able to pay off long-term liabilities in the near future. Based on the fact that A1< П1, то в этом случае баланс имеет текущую ликвидность.
An analysis of balance sheet liquidity showed that both at the beginning and at the end of the year the company does not have absolute liquidity, so in the next three months it will not be able to repay the most complex payments.
To determine whether an enterprise has current solvency, you need to compare the total amount of A1 and A2 with the total amount of P1 and P2:
Current liquidity
at the beginning of the year at the end of the year
A1+A2=8528.5 A1+A2=90851.4
P1+P2=62284.9 P1+P2=48129.1
A<П=-53756,4 А>P=+42722.3
The amount of the most liquid and quickly sold assets at the beginning of the year amounted to 8528.5 thousand tenge on account of which it is necessary to repay payments in an amount 7.3 times higher than the amount of the quickly sold assets themselves. However, at the end of the year, this situation changed; the growth rate of the most liquid and quickly realizable assets amounted to 965.3% or in the amount of 90851.4 thousand tenge, with this amount it is necessary to cover 48129.1 thousand tenge of urgent liabilities. In addition, it should be noted that the amount of assets over liabilities increased from -53756.4 to +42722.3 thousand tenge, thus, the evidence provided allows us to recognize the enterprise as solvent.
Table 5 Analysis of liquidity ratios for Prima LLP for 2008
Conclusion: Calculations of the absolute liquidity ratio showed that at the end of the year this indicator sharply exceeded the regulatory limits by 1.3 points and amounted to 2.3 points, which means that at the moment the balance is absolutely liquid since it can immediately repay 230% at the end of the year of their current obligations.
The quick liquidity ratio shows that the company at the end of the year can pay its current obligations in full by 100%, even remaining for the development of its enterprise.
The current liquidity ratio at the beginning of the year showed that current assets exceeded current liabilities by 1.6 times, and at the end of the year current assets exceeded current liabilities by 5.8 times, thus the company has current liquidity.
At the beginning of the year, the total liquidity ratio shows that, due to all the existing assets in the enterprise, it will not be able to pay off all its obligations by 100%. However, at the end of the year this coefficient increases sharply by 0.5 points. Also, at the end of the year, all liquidity ratios increase, this indicates an increase in the degree of liquidity of the balance sheet.
Conclusion
The organization and methodology of independent audit have not yet received adequate coverage in the educational and methodological literature, which creates significant difficulties both in the training of audit personnel and in audit activities. This necessitates the need to prepare a training manual, which reflects the main issues of organizing audit activities, conducting audits and methods of auditing business objects.
Thus, we can conclude that today there is no unified methodology for assessing the financial condition of enterprises based on annual reporting forms compiled in accordance with national accounting standards. In this regard, it will be relevant to resolve controversial issues in the field of methodology of financial analysis and assessment of financial condition.
To summarize, it should be noted that for the normal functioning of an enterprise, in its practice it must use a variety of techniques and methods of conducting an audit. Thus, they will be able to avoid problems when checking the enterprise by control and audit services, reduce the number of errors in accounting and financial reporting, provide internal and external users with truthful, complete and reliable information about the activities of the enterprise, maintaining (or) giving it an impeccable reputation.
Analyzing the activities of the Prima LLP enterprise and taking into account the regulatory framework for auditing activities in the Republic of Kazakhstan, it is necessary, in our opinion, to make the following proposals:
introduce the position of internal auditor at the enterprise;
amend the enterprise's accounting policy regarding audits;
together with external audit, conduct an audit of the enterprise with the involvement of its own (internal) auditors.
Subject to the above proposals, Prima LLP will be able to easily maintain accounting records and submit reports to regulatory authorities, and show the best results of its activities to attract national and foreign investors.
During the crisis, many enterprises on the Kazakh market of goods and services simply disappear because they could not cope with the rate of inflation and, with many other factors, it should be noted that Prima LLP at the end of 2008 improved its basic indicators, which means it is developing and strengthens its position among competitors.
Bibliography
1. Law of the Republic of Kazakhstan dated November 20, 1998 No. 304-I “On auditing activities” (as amended and supplemented as of February 19, 2007)
2. Aitzhanova Zh.N. Accounting, reporting, audit of sustainable economic development - Almaty: Economics, 2002.
3. Ablenov D.O. Fundamentals of auditing - Almaty: Economics, 2003.
4. Gracheva M.E. International auditing standards
5. Dyusembayev K.Sh. Audit and analysis of economic activities - Almaty, 2000
6. Zharylgasova B.T. Suglobov A.E. International auditing standards - M., 2005
7. Marenkov N.L. Audit and control - M., 2004
8. Mironova O.A., Azarskaya M.A. Audit: theory and methodology - M., 2005
9. Torshaeva Sh.M. Audit – Karaganda, 2002
10. Torshaeva Sh.M. Audit theory - Karaganda, 2000
In order to identify the depth and reasons for the insolvency of a bankrupt enterprise, it is necessary to analyze the financial position of the enterprise. Therefore, one of the goals audit is an audit of financial condition.
An audit of the financial condition of an enterprise involves comprehensive assessment its activities based on the use of a number of indicators. Such an assessment includes the selection of the most significant indicators for a particular organization, calculated on the basis of accounting (financial) reporting data, analysis of their dynamics, and study of the influence of each of them on the value of the complex indicator.
A financial audit begins with a preliminary assessment of the reliability of accounting (financial) reporting data.
To fulfill the requirements for conducting an initial audit of initial and comparative indicators financial statements, the following audit procedures are recommended:
* get acquainted with the financial and economic activities of an economic entity;
* analyze the accounting policy of an economic entity;
* familiarize yourself with the procedure for preparing financial statements;
* make sure that the synthetic and analytical accounting;
* analyze the system internal control;
* evaluate the work of the internal audit department of an economic entity and, if possible, use the results of the internal audit;
* carry out the necessary analytical procedures;
* send written requests for confirmation of certain information to the management of the economic entity and third parties;
* organize the sending of written requests (on behalf of the economic entity) to the previous audit organization for the provision necessary information;
* get acquainted with the audit report and written information to the management of the economic entity based on the audit results prepared by the previous audit organization;
* if necessary, request from the economic entity source documents related to the previous reporting period;
* consider the impact on the initial and comparative financial statements of adjustments made economic entity in accordance with the previous conclusion.
When checking accounting (financial) statements, the auditor should be guided by regulatory documents, the form of organization of accounting and inventory data carried out before drawing up the annual report.
Conclusion
The audit of a bankrupt organization is important both in practical and scientific terms. At the moment, there is a need to develop a standard regulating the audit of each of the bankruptcy procedures, as well as the definition of criteria mandatory audit and his interactions with the administration. These activities should be aimed at improving the existing institution, minimizing abuses in this area and the possibility of providing related consulting services in the field of legislation (tax, labor, civil, criminal).
One of them effective forms state influence may be the involvement of independent competent auditors in bankruptcy problems, based on the creation of an appropriate legislative framework. In countries with developed market economies, the state actively attracts audit firms to carry out certain functions of state financial control. At the same time, state financial control authorities do not consider audit firms to be their competitors, but consider them as assistants in their work. Modern conditions require improvement of audit activities in accordance with the increasingly complex economic processes And financial technologies. In this regard, the problem of further improving the quality of audit activities based on the widespread implementation of audit standards, adapting them to the practical conditions and characteristics of clients’ activities, and strengthening the system of internal control is of paramount importance.
MINISTRY OF EDUCATION AND SCIENCE OF THE RUSSIAN FEDERATION
NON-GOVERNMENTAL EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION
"NORTH CAUCASIAN HUMANITIES AND TECHNICAL INSTITUTE"
Department of Economics and Finance
COURSE WORK
In the discipline Audit
On the topic: Audit of financial condition
Specialty: 080100.62
Group: UZBE-11 BUA
Head of work:
Simirenko O.V.
(title, academic degree)
The work is protected with an assessment
Stavropol, 2013.
In this paper we will look at financial analysis in the audit of financial condition. An audit of financial condition begins with determining the solvency of the enterprise. A solvent enterprise is one whose current assets (inventories, cash, accounts receivable and other assets) is greater than or equal to its external debt (liabilities). We will analyze in detail the analysis of the solvency of the enterprise. IN course work the most important points and directions in conducting financial analysis, both theoretically and practically, were considered.
§1 FINANCIAL ANALYSIS IN THE AUDIT OF FINANCIAL CONDITION
6
§2 AUDIT OF THE BALANCE SHEET AND ASSESSMENT OF THE FINANCIAL CONDITION OF THE ENTERPRISE 8
§3AUDIT OF PROFIT OF FINANCIAL STATUS OF THE ENTERPRISE 19
§4 ANALYSIS OF SOLVENT CAPACITY IN THE AUDIT OF FINANCIAL STATUS 23
§5 FEATURES OF ANALYSIS OF FINANCIAL RATIOS DURING AN AUDIT 26
6 CALCULATION PART 31
CONCLUSION 39
LIST OF SOURCES USED 41
INTRODUCTION
To ensure the survival of the enterprise in modern conditions, management personnel must, first of all, be able to realistically assess the financial condition of both their enterprise and existing potential competitors. Financial condition is the most important characteristic economic activity of an enterprise. It determines the competitiveness, potential for business cooperation, assesses the extent to which the economic interests of the enterprise itself and its partners are guaranteed in financial and production terms. However, the ability to realistically assess the financial condition is not enough for the successful functioning of an enterprise and its achievement of its goal.
The purpose of this course work is to study methods of analyzing financial condition as tools for making management decisions and developing, on this basis, practical recommendations and conclusions.
The subject of the study is the analysis technique itself financial activities and the practice of applying it in management activities.
Analysis of the financial condition of enterprises various forms property was reflected in many sources of scientific literature.
They examined the following concepts used in the course work: enterprise finance; financial condition; types, methods and techniques of financial analysis; a system of indicators characterizing the financial condition; analysis of financial statements and balance sheet structure; assessment of solvency, stability, profitability of the enterprise.
Enterprise finance is economic category, the peculiarity of which lies in the scope of its action and its inherent functions.
Modern financial system The state consists of centralized and decentralized finance.
"Finance is a set of economic monetary relations that arise in the process of production and sale of products, including the formation and use cash income, ensuring the circulation of funds in the reproduction process, organizing relationships with other enterprises, the budget, banks, insurance organizations, etc."
Based on this, financial work at the enterprise is primarily aimed at creating financial resources for development, in order to ensure increased profitability, investment attractiveness, i.e. improving the financial condition of the enterprise.
Financial condition is a set of indicators that reflect the availability, placement and use of financial resources.
§1 FINANCIAL ANALYSIS IN THE AUDIT OF FINANCIAL CONDITION
In the development of audit practice, the division of interests of various partner groups of an enterprise (commercial organization): the interests of the enterprise administration and the interests of owners, shareholders, and investors played a great role.
The significance of the audit from the point of view of the owner (investor) lies not only in obtaining information about the reliability financial results enterprise and compliance with accounting policies current legislation, but also in mastering the following analytical information to justify decision-making on investment management: enterprise dynamics - growth, stability, decline; capital structure of the enterprise: does this structure imply a risk for the invested capital; the place of the enterprise among other enterprises in this industry.
As a result of the audit, it is important for the executive administration to determine reserves for increasing efficiency commercial activities, factors of profit growth, loss reduction.
Financial analysis as an integral part of the audit provides answers to these and other questions. We can safely say that the quality of decisions made depends entirely on the quality of the analytical justification.
Analytical procedures when conducting an audit in international auditing standards are used to analyze indicators in order to obtain audit evidence. Analysis of reporting is also discussed in international standards and as related work during the audit. Thus, the strengthening of the analytical focus of the audit is manifested not only in the increase in the number of financial analysis services provided to clients, but also in the increasing role of analytical procedures in the provision of other audit services, primarily when conducting an audit of a completed audit. financial statements.
The evolution of audit development is manifested in a steady trend of increasing the share of analytical services in activities audit firms, which improves the quality of the audit as a whole. An important task of auditing at present is to assist enterprise specialists in improving accounting and reporting, increasing economic feasibility when making management decisions. The auditor should strive not so much to identify individual errors and deliberate distortions in accounting (this function is still one of the main ones), but rather to find systematic irregularities in accounting, from the analyst’s point of view.
Financial analysis in an audit, depending on the task at hand, is a tool for obtaining audit evidence and a type of service accompanying the audit.
§2 AUDIT OF THE BALANCE SHEET AND ASSESSMENT OF THE FINANCIAL CONDITION OF THE ENTERPRISE
The most important role in assessing the financial results of an enterprise is played by the analysis of the financial condition according to the balance sheet. According to current regulatory documents the balance is currently compiled in net valuation. The balance sheet total gives an approximate estimate of the amount of funds that can be obtained for the property, for example, in the event of liquidation of the enterprise. The current “price” of assets is determined by market conditions and can deviate in any direction from the accounting value, especially during periods of inflation. The analysis is carried out on the balance sheet using one of the following methods:
- Analysis directly from the balance sheet without first changing the composition of balance sheet items;
- Analysis based on a compacted comparative analytical balance sheet, which is constructed by aggregating some elements of balance sheet items that are homogeneous in composition;
- Analysis of the balance sheet, subjected to additional adjustment for the inflation index, followed by aggregation of items in the necessary analytical sections.
Analysis directly from the balance sheet is quite labor-intensive and ineffective, because too much a large number of calculated indicators do not allow us to identify the main trends in the financial condition of the organization.
One of the creators of the balance sheet N.A. Blatov recommended studying the structure and dynamics of the financial condition of an enterprise using a comparative analytical balance sheet.
The scheme for constructing an analytical balance is given in Table. 1.
Table 1- Scheme for constructing an analytical balance
The analytical balance sheet covers a lot important indicators, characterizing the statics and dynamics of the financial condition of the organization. This balance actually includes indicators of both horizontal and vertical analysis.
From the analytical balance sheet you can obtain the following most important characteristics of the financial condition of the organization:
The total value of the organization's property, equal to the balance sheet minus losses.
The cost of immobilized (i.e., non-current) funds (assets) or real estate, equal to the total of section 1 of the balance sheet.
The cost of mobile (working) funds equal to the total of section 2 of the balance sheet.
Cost of material working capital.
Magnitude own funds organization, equal to the total of section 4 of the balance sheet.
The amount of borrowed funds equal to the sum of the results of sections 5 and 6 of the balance sheet
The amount of equity in circulation is equal to the difference in the results of sections 4 and 1 of the balance sheet. If the organization has losses, then they are also deducted from section 4.
1. Working capital equal to the difference between current assets and current liabilities
When analyzing the comparative balance, it is necessary to pay attention not to the change in the specific weight of the value of its own working capital in the value of property, on the ratio of growth rates of equity and borrowed capital, as well as on the ratio of growth rates of receivables and payables. With stable financial stability, the organization should increase in dynamics the share of its own working capital, growth rate equity should be higher than the growth rate of borrowed capital, and the growth rates of receivables and payables should balance each other.
The next analytical procedure is vertical analysis - another presentation of the financial statement in the form of relative indicators. This representation allows you to see the share of each balance sheet item in its overall total. An obligatory element of the analysis is the time series of these quantities, through which it is possible to track and predict structural changes as part of assets and their sources of coverage.
Thus, two main features of vertical analysis can be distinguished: the transition to relative indicators allows comparative analysis enterprises, taking into account industry specifics and other characteristics;
relative indicators smooth out the negative impact of inflationary processes, which significantly distort the absolute indicators of financial statements and thereby complicate their comparison over time.
Horizontal balance sheet analysis consists of constructing one or more analytical tables in which absolute balance sheet indicators are supplemented by relative growth (decrease) rates. The degree of aggregation of indicators is determined by the analyst. As a rule, the basic rates are taken for a number of years (adjacent periods), which makes it possible to analyze changes in individual balance sheet items, as well as predict their values.
Horizontal and vertical analyzes complement each other, so in practice it is possible to build analytical tables that characterize both the structure of the reporting accounting form, and the dynamics of its individual indicators.
Trend analysis is part of forward analysis and is necessary in financial management. A schedule for the possible development of the organization is being drawn up. The average annual growth rate is determined and the forecast value of the indicator is calculated.
This is the easiest way financial forecasting. Now at the level of an individual organization, the calculation period is a month or a quarter. Analysis of the dynamics of the balance sheet currency, the structure of assets and liabilities of the organization allows us to make a number of important conclusions necessary both for the implementation of the current financial economic activity, and for making management decisions for the future.
For example, a decrease (in absolute terms) in the balance sheet currency for reporting period indicates a reduction in the organization's economic turnover, which could lead to its insolvency. Establishing the fact of curtailment of economic activity requires a thorough analysis of its reasons:
reduction in effective demand for goods, works, services of a given organization;
restricting access to markets for necessary raw materials, materials, and semi-finished products;
gradual inclusion of branches (subsidiaries) into active economic turnover at the expense of the main organization, etc.
When analyzing the increase in the balance sheet currency for the reporting period, it is necessary to take into account the impact of the revaluation of fixed assets when the increase in their value is not associated with development production activities. It is most difficult to take into account the impact of inflationary processes, but without this it is difficult to draw a definite conclusion about whether the increase in the balance sheet currency is a consequence of only an increase in price finished products under the influence of inflation of raw materials, materials, or it also indicates the expansion of financial and economic activities.
Research into the structure of the balance sheet liability allows us to establish one of the possible reasons for the financial instability (sustainability) of the organization. For example, increasing the share of own funds from any source helps to strengthen the financial stability of the organization. At the same time, the presence of retained earnings can be considered as a source of replenishment of working capital and reduction of the level of short-term accounts payable.
Research into changes in the structure of an organization's assets allows us to obtain important information. For example, an increase in the share of working capital in property may indicate:
Formation of a more mobile asset structure, contributing to the acceleration of the turnover of the organization’s funds;
Diversion of part of current assets to lending to consumers of finished products, goods, works and services of the organization, subsidiaries and other debtors, which indicates the actual immobilization of this part of working capital from the production process;
Closing down the production base;
Distortions of the real assessment of fixed assets due to the existing order of their accounting and so on.
In order to draw accurate conclusions about the reasons for changes in this proportion in the structure of assets, it is necessary to conduct a more detailed analysis of the sections and individual items of the balance sheet asset, in particular, to assess the state of the organization’s production potential, the efficiency of use of fixed assets and intangible assets, turnover rate of current assets, etc.
When analyzing the first section of the balance sheet asset, you should pay attention to the trends in changes in such an element as construction in progress, since this item does not participate in production turnover and, therefore, under certain conditions, an increase in its share may negatively affect the performance of financial and economic activities.
Availability of long-term financial investments indicates the investment orientation of the organization's investments.
Considering that the share of fixed assets may change as a result of the impact external factors for example, the procedure for their accounting, in which there is a lagging adjustment in the value of fixed assets in conditions of inflation, while raw materials, supplies, and finished products can grow at a fairly high rate, it is necessary to pay attention to changes in absolute indicators for the reporting period.
The presence of intangible assets within an organization indirectly characterizes the strategy chosen by the organization as innovation, since it invests in patents, licenses, and other intellectual property.
A detailed analysis of the effectiveness of using intangible assets is very important for the management of an organization. However, according to balance sheet it cannot be carried out. It requires information from Form No. 5 and internal accounting information.
Height current assets may indicate not only an expansion of production or the effect of an inflation factor, but also a slowdown in their turnover. This objectively creates a need to increase their mass.
When studying the structure of inventories, it is advisable to focus on identifying trends in changes in such elements of current assets as raw materials, supplies and other similar assets, costs in work in progress, finished goods and goods for resale, and shipped goods.
An increase in the share of industrial inventories may indicate:
Increasing the production potential of the organization;
The desire to protect through investments in production reserves monetary assets organizations from depreciation under the influence of inflation;
The irrationality of the chosen economic strategy, as a result of which a significant part of current assets is immobilized in inventories, whose liquidity may be low.
Thus, although the trend towards an increase in inventories may lead to an increase in the value of the current liquidity ratio over a certain period of time, it is necessary to analyze whether this increase occurs due to the unreasonable diversion of assets from production turnover, which ultimately leads to an increase in accounts payable and a deterioration in financial condition.
IN general outline Signs of a “good” balance are the following characteristics:
The balance sheet currency at the end of the reporting period increased compared to the beginning;
The growth rate of current assets is higher than the growth rate of non-current assets;
The organization's equity capital exceeds its borrowed capital and its growth rate is higher than the growth rate of borrowed capital;
The growth rates of accounts receivable and accounts payable are approximately the same.
The assessment of the financial condition of an enterprise is determined primarily by the transition of our economy to market relations.
Financial condition refers to the ability of an enterprise to finance its activities. It is characterized by: provision of financial resources necessary for normal functioning enterprises, the feasibility of their placement and efficiency of use, financial relationships with other legal and individuals, solvency and financial stability.
Assessment of financial position - (English estimation of financial position) - a method that allows you to reveal the financial well-being and dynamics of development of an economic entity.
An assessment of the financial condition of an enterprise is carried out in the following cases:
1. Reorganization, restructuring, liquidation of the company.
2. Concluding a transaction of purchase and sale or lease of a business (both individual parts and all property).
3. Revaluation of financial assets.
4. Obtaining various loans and investments.
5. Insurance of company property.
6. Bankruptcy procedure with forced sale of an enterprise or part of it.
The main goals of the financial condition of the enterprise are:
1. Assessment of the dynamics of movement and the state of the composition and structure of assets.
2. Assessment of the dynamics of movement, composition, condition and structure of sources of equity and borrowed capital.
3. Analysis of calculated and absolute indicators of the company’s financial stability, assessment of changes in level and identification of changing trends.
4. Analysis of the company’s solvency, the liquidity of its balance sheet assets.
The result of assessing the financial condition of the enterprise is:
1. Established indicators of financial position.
2. Identified changes in the financial condition of the company in space and time.
3. Identified main factors that cause changes in financial condition.
4. Conclusions and forecast on the main trends in the financial condition of the company.
In the domestic literature, the following main groups of tasks of internal analysis of the financial condition of an enterprise are distinguished:
1. Identification of financial position.
2. Identification of changes in financial condition in space and time.
3. Identification of the main factors that caused changes in financial condition.
4. Timely identification and elimination of deficiencies in financial activities and the search for reserves for improving the financial condition of the enterprise and its solvency.
5. Forecasting possible financial results, economic profitability based on the actual conditions of economic activity and the availability of own and borrowed resources, developing models of financial condition for various options for using resources.
6. Development of specific measures aimed at more efficient use of financial resources and strengthening the financial condition of the enterprise. The content of the external assessment of the financial condition is largely determined by the sphere of economic interests of users.
The assessment of financial condition can be carried out using various types of models that allow structuring and identifying the relationships between the main indicators. There are three main types of models: descriptive, predicative and normative.
Descriptive models, also known as narrative models, are fundamental to assessing the financial condition of an enterprise. These include: building a system of reporting balance sheets, presenting financial statements in various analytical sections, vertical and horizontal analysis reporting, system of analytical coefficients, analytical notes for reporting. All these models are based on the use of accounting information.
Predictive models are models of a predictive, predictive nature. They are used to forecast a company's income and its future financial condition. The most common of them are: calculating the point of critical sales volume, building predictive financial reports, dynamic analysis models (strictly determined factor models and regression models), situation analysis models.
Regulatory models allow you to compare the actual results of enterprises with the expected ones calculated according to the budget. These models are mainly used in domestic financial analysis. Their essence boils down to the establishment of standards for each item of expenditure for technological processes, types of products, responsibility centers and to the analysis of deviations of actual data from these standards. The analysis is largely based on the use of strictly determined factor models.
§3 AUDIT OF PROFIT AND FINANCIAL CONDITION OF THE ENTERPRISE
Final financial result ( net profit or net loss) is made up of the financial result from common species activities, as well as other income and expenses, including emergency ones.
The debit of account 99 “Profits and Losses” reflects losses (losses, expenses), and the credit reflects the profits (income) of the organization. A comparison of debit and credit turnover for the reporting period shows the final financial result of the reporting period.
Accounts 90 “Sales” and 91 “Other income and expenses” are intended to systematize and accumulate information on income and expenses for conducting normal activities of the organization.
Account 90 “Sales” generates the financial result from economic activities, which constitute the main purpose of creating the organization. It represents the difference between sales revenue and the cost of products (works, services) sold.
Account 91 “Other income and expenses” reflects all operating and non-operating income and expenses (except for extraordinary income and expenses, as well as income tax expenses).
At the end of each month, the balance of income and expenses from accounts 90 “Sales” and 91 “Other income and expenses” is transferred to account 99 “Profits and losses”. Directly on account 99 “Profits and losses” income and expenses associated with emergency circumstances in the organization’s activities, or the so-called extraordinary income and expenses.
The amount of income tax payments also goes directly to account 99 “Profits and losses”. As a result, account 99 “Profits and losses” reveals the organization’s net profit, which is the basis for declaring dividends and other distribution of profits. This value is transferred to account 84 by the final entries of December. retained earnings (uncovered loss)".
Distribution of profits implies the accrual of dividends (income), the transfer of funds to reserve funds organizations, accumulation funds, covering losses of previous years.
All these transactions are recorded in accounting as the debit of account 84 and in correspondence with the accounts: 75 “Settlements with founders” - for the amount of accrued dividends, 82 “Reserve capital” - for the amount of contributions to reserve funds.
After reflecting these transactions, the balance of account 84 shows the amount of retained earnings, which remains unchanged until the corresponding decision of the shareholders of the JSC or the participants of the LLC.
The auditor needs to check:
The correctness of the enterprise’s determination of the estimated profit and revenue from the sale of products (works, services) for calculating advance payments to the budget;
Availability of an order accounting policy indicating the procedure for recognizing income and expenses;
The correctness of the definition and legality of reflecting the actual profit from the sale of products (works, services) in the accounting accounts;
Legality and validity of creating reserves for doubtful debts;
Correct determination of profit from the sale of fixed assets and other property of the enterprise;
Correct reflection of data on barter transactions;
Correct reflection of profits received from the buyer in the form of financial assistance or short-term loan;
Correct reflection in accounting of revenue from sales of products of auxiliary, auxiliary and service industries;
Correct reflection in accounting of revenue from sales of products when carrying out foreign economic activity;
The correctness of accounting for losses incurred from the gratuitous transfer of fixed assets and other assets;
Correct reflection in accounting of financial sanctions subject to withdrawal to the budget for exceeding permissible emissions (discharges) of pollutants into the environment;
Correct reflection in accounting of results from leasing property;
Correctness of reflection of revenue from production overhaul fixed assets made in an economic way;
Correctness of analytical and synthetic accounting on accounts 99 “Profits and losses”, 59 “Reserves for impairment of investments in securities", 63 "Provisions for doubtful debts", 84 "Retained earnings (uncovered loss)".
When checking profits (losses) from non-operating operations, it is necessary to establish:
The correctness and completeness of the reflection of income (losses) from fines, penalties, penalties awarded or recognized by debtors for violation of the terms of business contracts, as well as from compensation for losses caused;
Completeness of maintaining interest on amounts of funds listed on settlement, current, currency and other accounts of the enterprise;
Correctness and completeness of income received from amounts held in deposit accounts;
Compliance with the terms of loan agreements and complete receipt of income for all types of loans;
The correctness of the reflection of income (expenses) from exchange rate differences on transactions with currency from the amount difference arising from the taxpayer, if the amount of liabilities incurred, calculated at the rate of conditional currency established by the agreement monetary units on the date of sale (receipt of goods) property rights, does not actually correspond to the amount paid in rubles;
Correctness of definition additional expenses for orders for which settlements were completed in the past years;
Legality of writing off losses from natural disasters;
Correct write-off of debts and receivables;
Correctness of receipt and documentation income from equity participation in other enterprises;
Correctness and completeness of receipt of dividends on shares and income on bonds and other securities;
Completeness of transfer and receipt of income from the rental of property;
Legality of writing off expenses for the maintenance of mothballed capacities and facilities;
The correctness of the write-off of losses from the write-off of previously awarded debts for shortages and thefts, for which the writs of execution were returned;
Correct write-off of costs for canceled orders;
Correct execution of documents for writing off uncompensated losses from natural disasters;
Correctness of attribution to non-operating income and expenses of other operations;
Correspondence of synthetic and analytical accounting entries for accounts 99 “Profits and losses”, 84 “Retained earnings (uncovered loss)” with entries in the General Ledger, balance sheet and financial reporting forms.
During the year, the amounts of advance payments of income tax are reflected in the credit of account 51 “Current accounts” and the debit of account 68 “Calculations for taxes and fees”.
The amounts of actual payments due (according to calculations) are recorded on the credit of account 68 “Calculations for taxes and fees” in correspondence with account 99 “Profits and losses”.
By comparing debit and credit turnover in account 68 (sub-account “Income Tax”), the amount of debt on payments to the budget or overpayments is determined. Repayment of debt is reflected by an entry in the debit of account 68 “Calculations for taxes and fees” and the credit of account 51 “Current accounts”.
When the overpayment amount is offset against the accrued payments of the next period, no additional entries are made. If the amount of the overpayment is returned to the organization from the budget, then an entry is made in the debit of account 51 “Current accounts” in correspondence with account 68 “Calculations for taxes and fees.”
§ 4 ANALYSIS OF COMPANY SOLVENTABILITY
To determine the ability of an enterprise to repay its debt, liquidity and solvency indicators are used. The assessment of an enterprise's solvency and liquidity is carried out through a number of coefficients, the study of which allows the analyst to obtain answers to questions of interest.
Moreover, like most similar indicators, these coefficients are compared with the same coefficients that were calculated for the enterprise in previous years, and the values of the same indicators on average for the industry.
Solvency is the ability of an enterprise to timely repay all its payment obligations when due.
The higher this ratio, the higher the share of equity capital in total amount financial resources of the enterprise. In this case, it is able to pay off not only short-term, but also long-term obligations. Thus, the solvency of an enterprise characterizes the degree of protection of the interests of creditors and investors of this enterprise. A high solvency ratio exceeding the calculated norm (within 50%) means that the enterprise has high production and financial potential to attract borrowed funds and bank loans.
Liquidity is the ability of an enterprise to repay its obligations with assets, the period of transformation of which into money corresponds to the period of repayment of obligations. Each type liquid assets confronts a certain type of obligation. Liquidity depends on the degree to which the amount of available means of payment matches the amount of short-term debt obligations. An enterprise may be liquid to a greater or lesser extent, since its current assets include a variety of working capital, among which there are both easily implemented and difficult to implement.
The liquidity of an enterprise is manifested through the liquidity of its assets and balance sheet as a whole. First of all, the liquidity of an enterprise is the liquidity of its assets, i.e. their ability to be converted into money, as a rule, according to market price or with a small price concession. The amount of liquidity of assets is also related to the time it takes to convert them into money: the faster, the more liquid.
The concepts of solvency and liquidity are very close, but the second is more capacious. Solvency depends on the degree of balance sheet liquidity. At the same time, liquidity is characterized as Current state accounts and perspective. An enterprise can be solvent for reporting date, but have unfavorable opportunities in the future. Analysis of balance sheet liquidity consists of comparing funds for an asset, grouped by degree of decreasing liquidity, with short-term liabilities on liabilities, which are grouped according to the degree of urgency of their repayment.
§5 FEATURES OF ANALYSIS OF FINANCIAL RATIOS DURING AN AUDIT
Financial ratios are relative indicators of the financial condition of an enterprise. They are calculated in the form of ratios of absolute indicators of financial condition or their linear combinations. According to the classification of N.A. Blatov, relative indicators of financial condition are divided into distribution coefficients and coordination coefficients.
Distribution coefficients are used in cases where it is necessary to determine what part a particular absolute indicator of financial condition makes up of the total of the group of absolute indicators that includes it.
Coordination coefficients are used to express the relationships between essentially different absolute indicators of financial condition or their linear combinations with different economic meanings.
Analysis of financial ratios consists of comparing their values with basic values, as well as studying their dynamics for the reporting period and for a number of years. As basic values, the values of indicators of a given enterprise, averaged over a time series, relating to past favorable periods from the point of view of financial condition are used; average industry and national economic values of indicators; indicator values calculated based on the reporting data of the most successful competitor. In addition, theoretically substantiated or obtained as a result of expert surveys values characterizing the optimal or critical values of relative indicators can serve as a basis for comparison.
For an accurate and complete description of the financial condition of an enterprise and trends in its changes, a relatively small number of coefficients is sufficient. It is only important that each of these indicators reflects the most significant aspects of the financial condition.
The system of relative financial ratios according to economic meaning can be divided into a number of characteristic groups:
Indicators for assessing the profitability of an enterprise;
Indicators for assessing management efficiency or product profitability;
Indicators for assessing business activity or capital productivity;
Indicators for assessing market sustainability. Indicators for assessing the liquidity of balance sheet assets as the basis for solvency.
When analyzing the financial condition of an enterprise using the coefficient method, an assessment is made of the individual, most significant characteristics financial condition of the enterprise using relative indicators.
The analysis uses distribution coefficients and coordination coefficients. Distribution coefficients are used when it is necessary to determine what part of a particular absolute indicator of financial condition is from the total of the group of absolute indicators that includes it. Coordination coefficients are used to express the relationships between those having different economic sense in absolute terms financial condition or their linear combinations.
The assessment of the current financial condition of the enterprise is carried out according to the balance sheet form 1 using the coefficients of the financial condition of the enterprise, the efficiency of use of property and capital - according to the data of forms 1 and 2 of the balance sheet according to the coefficients of financial performance. The coefficient method uses relative dimensionless quantities.
Conclusions on financial ratios enterprises:
Coefficient of real value of industrial property:
Kip = (NA + OS + C&M + WIP) / IB,
Where NA are intangible assets,
OS - fixed assets,
SiM - raw materials and supplies,
WIP - costs in work in progress, distribution costs,
Information security is the result of the balance sheet.
At the beginning of the year Kip = 0.05.
At the end of the year Kip = 0.06.
The coefficient of the real value of industrial property reflects the share of the real value of industrial property in the property of the enterprise. The recommended limit is at least 0.5. The enterprise does not comply with the recommended limit. IN in this case It is advisable to replenish equity capital (for example, by increasing the authorized capital) or attracting long-term borrowed funds to increase property for production purposes.
Autonomy coefficient.
Ka = P3 / IB,
where P3 - capital and reserves,
Information security is the result of the balance sheet.
At the beginning of the year Ka = -0.01
At the end of the year Ka = -0.02
It shows the share of equity capital advanced for the implementation of statutory activities in the total amount of all funds of the enterprise. The higher the share of equity capital, the greater the company's chances of coping with unforeseen circumstances in a market economy. Minimum threshold value autonomy coefficient 0.5. In this case, the restriction is not met, therefore, the obligations of the enterprise cannot be covered by its own capital.
Debt to equity ratio
Kz/s = (P4 + P5) / P3,
where Pz - capital and reserves,
P5 - short-term liabilities.
At the beginning of the year Kz/s = -73.11
At the end of the year Kz/s = -63.98
The debt-to-equity ratio shows how much borrowed capital is raised per 1 ruble of equity capital invested in assets.
Its normal limitation is Kz/s ≤ 1. An increase in the ratio reflects the excess of the amount of borrowed funds over own sources their coverings.
Maneuverability coefficient (Km).
Km = (P3 + P4 - A1) / P3,
where P3 is capital and reserves,
P4 - long-term liabilities,
A1 - non-current assets,
At the beginning of the year Km = 1.36
At the end of the year Km = 1.42
The ratio shows what share of the enterprise's equity capital is in mobile form, allowing it to freely maneuver. A low value of this indicator means that a significant part of the enterprise’s equity capital is concentrated in mobile assets, which are less liquid and, therefore, cannot be converted into cash within a short time. The growth of the coefficient is assessed positively, although in this case, due to the very small absolute value of the enterprise’s equity capital, it is difficult to talk about the presence of a positive trend.
The coefficient of provision of reserves and costs with own sources of formation (Koz) is calculated using the formula:
Goats = (P3 + P4 - A1) / (Z + VAT),
6 CALCULATION PART
Task 7. Engineer Lukin A.M. issued on travel expenses 7000 den. units, travel period 3 days from 10/7/03 to 10/9/03 Lukin A.M. presented a receipt for hotel accommodation (two days) - 1500 den. units, air tickets - 4000 den. units, daily allowance calculation for 3 days is 180 den. units
Accounting by data advance report I made the following entries:
Dt 71 “Settlements with accountable persons”
Kt 50 “Cash desk” - 7000 den. units
Dt 20 “Main production”
Kt 71 “Settlements with accountable persons” 5680 den. units
Dt 84 “Retained earnings (uncovered loss)”
Kt 71 “Settlements with accountable persons” 1320 den. units
Make the necessary entries in the auditor's working document?
In the advance report of Lukin A.M. reflected.
For hotel accommodation (two days) - 1500 den. Units,
air tickets - 4000 den. units, including VAT
Daily allowance for three days - 540 (3*180) den. units,
Total:6040
We make calculations based on the advance report.
For hotel stays:
Accommodation expenses are within the norm 550*2=1100 den. units, above the norm 1500-1100 = 400 den. units,
Aviation tickets:
VAT = 4000 * 18/118 = 610.16 rubles, expenses for an air ticket 4000-610.16 = 3389.84 monetary units,
Daily allowance:
Within the norm 100*3 = 300 den. units, above the norm 540-300 = 240 den. units,
We reflect the following transactions on the accounts:
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Issued to Lukin A.M. to report |
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/ Audit control of the results of the financial and economic activities of the enterprise and its financial condition / Audit of the financial condition of the enterprise
Page 1
An audit of financial condition begins with determining the solvency of the enterprise. A solvent enterprise is one in which the amount of current assets (inventories, cash, accounts receivable and other assets) is greater than or equal to its external debt (liabilities).
Example.
Calculation of current assets of the enterprise, thousand UAH.
The external debt of an enterprise is determined according to the data in sections II and III of the liabilities side of the balance sheet. It includes short-, medium- and long-term loans and all accounts payable. In our example, it amounts to UAH 3,640 thousand at the beginning of the year. (1700 + 1940), at the end of the year - 2370 thousand UAH. (940 + 1430).
Comparing current assets with external liabilities, we can come to the conclusion that the enterprise is solvent, since for the past and reporting years current assets were greater than liabilities. However, it should be borne in mind that the presence of inventories at an enterprise (especially state-owned) does not determine real solvency, since in a market economy, inventories of work in progress, finished goods and other commodities material assets in the event of bankruptcy, enterprises may not be able to repay external debts(some of them are simply illiquid), but are on the balance sheet as reserves.
Marketable assets include cash and accounts receivable and to a certain extent (with the exception of remnants and stale goods) industrial inventories. Therefore, it is necessary to draw up an updated calculation of solvency, i.e. determine the compliance of easily marketable assets with external debt. Let us assume that there are no excess or unnecessary materials in the inventory. Then easily realizable assets for last year will amount to
7590 thousand UAH. [(6500 - 850) + 1940],
and for the reporting
11,150 thousand UAH. [(7200 - 1150) + 5100].
Comparison with external debt 4790 thousand UAH. and 3940 thousand UAH. shows the excess of assets over debt, which characterizes the enterprise as solvent.
An increase or decrease in the level of solvency of an enterprise is determined by an audit by a change in the indicator of working capital (current assets), which is defined as the difference between all current assets (in the given example, at the beginning of the year, 12,490 thousand UAH, at the end of the year - 14,750 thousand UAH. ) and short-term debts (4790 thousand and 3940 thousand UAH, respectively). The comparison shows the growth of the company's working capital. If at the beginning of the year it was UAH 7,680 thousand, then at the end of the year it was UAH 10,810 thousand, i.e. increased by 3130 thousand UAH. (10 810 - 7680).
Application of new forms of labor organization, restructuring organizational structure economic management at enterprises led to the emergence of joint-stock, small, rental and other forms of management. Thus, in state-owned enterprises, the authorized capital represents centralized sources of financing intended for the formation of fixed and, to a certain extent, working capital. At joint-stock enterprises, the authorized capital reflects the share capital, at small enterprises - deposits, shares, etc., at rental enterprises - the residual value of fixed assets leased. This provision significantly affects the formation of working capital. On state enterprise working capital is defined as the difference between the authorized capital and fixed assets; in joint-stock and other enterprises, working capital is the difference between current assets (sections II and III of the balance sheet) and external liabilities.
The sources of working capital formation are the increase in net income, long-term liabilities, share capital, etc. It must be borne in mind that the most reliable partner is considered an enterprise with a large amount of working capital, since it can meet its obligations and increase the scale of its activities.