MAIN CLUES TO ACTS OF NON-OBSERVANCE OF LAWS AND REGULATIONS

MAIN CLUES TO ACTS OF NON-OBSERVANCE OF LAWS AND REGULATIONS – Examination, inspection and investigation were already conducted by concerned functional bodies regarding the violations of laws and regulations such as borrowing and lending, payment relations, fines,…; – Payments were made without clear reasons or loans were provided to people with positions, powers; – Payments for services were too high as compared to other enterprises of the same branches or to the actual value of the provided services themselves; – Purchase/ sale prices [...]

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Examples of Conditions or Events Which Increase the Risk of Fraud or Error

Examples of Conditions or Events Which Increase the Risk of Fraud or Error Questions with respect to the integrity or competence of management – Management is dominated by one person (or a small group) an there is no effective oversight of the Directors of Board of Management; – There is a complex corporate structure where complexity suggests a deliberate act; – There is a continuing failure to correct major weaknesses in internal control and accounting systems where such corrections are practicable; – There is [...]

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QUALITY CONTROL OF AUDITING ACTIVITIES

QUALITY CONTROL OF AUDITING ACTIVITIES   GENERAL PROVISIONS 01. The purpose of this standard is to prescribe the basic principles and procedures and guide the application thereof to the quality control of audit work in the following aspects: a/ The audit firms’ policies and procedures relating to auditing activities; b/ Procedures relating to the work assigned to auditors and audit assistants in specific audits. 02. Auditors and audit firms must implement quality control policies and procedures for all auditing activities of audit firms and for [...]

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COSTS INCURRED AFTER INITIAL RECOGNITION

COSTS INCURRED AFTER INITIAL RECOGNITION 23. The costs incurred after the initial recognition of tangible fixed assets shall be recorded as increase in their historical cost if these costs are certain to augment future economic benefits obtained from the use of these assets. Those incurred costs which fail to meet this requirement must be recognized as production and business expenses in the period. 24. The costs incurred after the initial recognition of tangible fixed assets shall be recorded as increase in [...]

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DETERMINATION OF HISTORICAL COST OF TANGIBLE FIXED ASSETS

DETERMINATION OF HISTORICAL COST OF TANGIBLE FIXED ASSETS ON A CASE-BY-CASE BASIS Procured tangible fixed assets 14. The historical cost of a procured tangible fixed asset consists of the buying price (minus (-) trade discounts and price reductions), taxes (excluding reimbursed tax amounts) and expenses directly related to the putting of the assets into the ready-for-use state, such as ground preparation expense; initial transportation, loading and unloading expense; installation and trial operation expense (minus (-) amounts recovered from products and wastes [...]

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RECOGNITION OF TANGIBLE FIXED ASSETS

RECOGNITION OF TANGIBLE FIXED ASSETS 06. Criteria for recognition of tangible fixed assets: To be recognized as tangible fixed assets, assets must meet simultaneously all the following four (4) recognition criteria: a/ Future economic benefits will surely be obtained; b/ Their historical cost has been determined in a reliable way; c/ Their useful life is estimated at more than one year; d/ They meet all value criteria according to current regulations. 07. Tangible asset accounting is classified by groups of assets of the same nature and [...]

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NET REALIZABLE VALUE

NET REALIZABLE VALUE AND SETTING UP OF THE INVENTORY PRICE DECREASE RESERVE 18. The value of inventories cannot be fully recovered when they become damaged, outmoded, their selling prices fall or the finishing and/or sale costs rise. The marking-down of inventories to the level equal to the net realizable value is compliant with the principle that assets must not be shown at a value higher than the realized value estimated from their sale or use. 19. At the end of the [...]

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DETERMINATION OF THE VALUE OF INVENTORIES

DETERMINATION OF THE VALUE OF INVENTORIES 04. Inventories are valued according to their original prices. Where the net realizable value is lower than the original price, they must be valued according to the net realizable value. ORIGINAL PRICES OF INVENTORIES 05 The original price of inventories consists of the purchasing cost, processing cost and other directly-related costs incurred for having the inventories stored in the present place and conditions. Purchasing cost 06. The purchasing cost of inventories consists of the buying price, non-refundable taxes, [...]

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Nature of Tests of Controls

Nature of Tests of Controls 30. The auditor selects audit procedures to obtain assurance about the operating effectiveness of controls. As the planned level of assurance increases, the auditor seeks more reliable audit evidence. In circumstances when the auditor adopts an approach consisting primarily of tests of controls, in particular related to those risks where it is not possible or practicable to obtain sufficient appropriate audit evidence only from substantive procedures, the auditor ordinarily performs tests of controls to obtain [...]

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Considering the Nature, Timing, and Extent of Further Audit Procedures

Considering the Nature, Timing, and Extent of Further Audit Procedures Nature 12. The nature of further audit procedures refers to their purpose (tests of controls or substantive procedures) and their type, that is, inspection, observation, inquiry, confirmation, recalculation, reperformance, or analytical procedures. Certain audit procedures may be more appropriate for some assertions than others. For example, in relation to revenue, tests of controls may be most responsive to the assessed risk of misstatement of the completeness assertion, whereas substantive procedures may [...]

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