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Small company audit

Article Abstract:

A March 1985 report issued by the Department of Trade and Industry in Great Britain recommends the elimination of statutory audits for shareholder-managed firms (primarily small business enterprises) and the simplification of reporting requirements for small businesses. Despite these recommendations, the British government has decided to retain the small business auditing and reporting requirements. The purpose of auditing is discussed in light of the public's desire to eliminate such functions and the government's refusal to do so. It is recommended that either auditing practices be changed to meet current auditing objectives in Great Britain, or that auditing objectives be changed to correspond to auditing practices in Great Britain.

Standards, Auditing, Small business, Great Britain

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From just-in-case to just-in-time

Article Abstract:

The impact of just-in-time (JIT) manufacturing techniques on accounting practices is discussed. JIT has changed the emphasis of production from selling what is produced to producing what is sold. Goods are pulled through the production system by customer demand. The production process is seen as a continuous flow between various operations such as ordering, processing, and distributing. Accounting under JIT is shifting away from refining costs, valuing inventory, and performing variance analysis. Under JIT, inventories are being costed retrospectively, cost classifications are being reduced and simplified, and analyses of cost variances are being replaced by measures of quality and throughput ability.

Methods, Manufacturing industry, Manufacturing industries, Accounting, Just in time inventory systems, Just in time systems

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Developing the balance sheet-2

Article Abstract:

Abandoning automatic reconciliation of the balance sheet with the profit statement would be difficult, given the strong psychological hold of automatic reconciliation over the traditional thinking of accountants and the apparent weight that generally accepted accounting procedures carry with the courts. The root of the difficulty, however, is the automatic aspect of reconciliation; the introduction of a third financial statement, an explicit statement of reconciliation, in addition to the CCA profit statement and a current value balance sheet, would provide a meaningful alternative. Advantages of explicit reconciliation are detailed.

Analysis, Comparative analysis, Reconciliation, Financial statements

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