The list focuses on early, soft signs related to attitudes and awareness. Nothing wrong with the list in itself but it's not the list from the standards which I am used to and with which on an ongoing basis I view every client and potential client.
Just thought that as the ICB has brought it up ICB people here who have read that might like to consider the list from the standards.
The list is :
- Product Obsolesence
- Borrowing facilities not agreed
- Excessive reliance on short term borrowing
- Adverse key ratio's
- Negative operating Cashflows (Thats hinted at in the ICB list)
- Change of legislation affecting the clients business
- Loss of a major market or supplier
- Inability to pay creditors
- Pending Litigation
My Mnemonic is P BEAN CLIP and its taken (paraphrased) from ISA570 (Going Concern). Thats an Audit rather than an accounting standard but in many cases the audit standards simply emphasise how review of the application of accounting standards should be applied.
ISA570 is a good example of an audit standard that is equally applicable beyond audit.
And before anyone shouts at me for talking in accountant, ICB started it. (lol).
kind regards,
Shaun.
PS1. Do you think that it's worth having a Mnemonics thread. Sure that loads of people have some great Mnemonics that would really help people in exams.
PS2. Edited and thread cleaned up due to a misunderstanding (very minor in relation to TV. Nothing juicy or contentious so you've not missed anything)
PS3. Amended title of the thread as its being taken in a different direction.
-- Edited by Shamus on Tuesday 25th of February 2014 09:55:01 AM
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Ok, well I think that the Mnemonics is a good idea anyway and I'll keep this on the front page by adding one a day (I've got 41 that I commonly use but quite a few of them will be of no use to others. Some like TARA and SMART you will already know, others are mine an you won't.
OK, start the ball rolling. This one is for ISA315 (another audit standard) but the basis of it is getting to know you client which we all need to do whether its for audit work or not.
I do not work in Audit but I use this a lot. Each element of this Mnemonic is a broad brush worthy of sub Mnemonics of their own but for now I'm keeping this to one Mnemonic a day.
The Mnemonic that I use for Know your client is BOOGI RIFF SOS (it doesn't have to make sense, it just has to be memorable).
- Business Risks
- Ownership
- Operations
- Governance
- Internal Control
- Regulatory Environment
- Industry Specific considerations
- Financing
- Financial Performance
- Strategy
- Objectives
- Structure
Hope that the above proves useful to someone whether for exams or the real world where you are thinking about your clients business.
Kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Nice short, simple one today after two days of memorising quite long ones.
This one's in common use and many will know it but we'll also cover the associated matrix which many don't know.
Todays Mnemonic is on how to manage risks : TARA (some use ATRA or other variations but its all the same four letters).
- Transfer
- Avoid
- Reduce
- Accept
As promised above here's the risk management matrix :
Most are self explanatory but for Transfer thats simply advising that where likelihood of risk is low but the consequences are high then we should take insurance against the risk (i.e. the likelihood of a car crash is low but the consequences of an accident could be high).
That does not work where likelihood is high as insurance may be prohibitively expensive if indeed available at all.
Don't think of these things as simply restricted to bookkeeping and accountancy but rather think about them as the example of car insurance above in terms of your daily life and that will make them second nature rather than merely a concept for exams.
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Again this one's got an audit bias but is a handy list of things to watch out for when looking at inventory so not just one for the exam hall.
STIFF MOD
- Slow Moving Stock
- Theft of Stock
- Inappropriate estimates used
- False Sales
- False Stock take records
- Misrepresentation of Work in Progress
- Obsolete Stock
- Damaged Stock
Same time same place tomorrow,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Today we'll do the issues with using manual controls.
This one is more for the exam hall than the workplace as its really just common sense but when the clocks ticking away at the front of the hall its easy to forget one of them in your answer.
The Mnemonic that I use is BIO CE
Which is a way to remember that manual controls may be :
- Bypassed
- Ignored
- Overridden
- Consistency of application cannot be assumed
- Prone to Errors
I tried using CP as the last two letters but for some reason it never jelled where CE for some reason does.
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I think that many of us have our little pocket books or filofaxes or decks of index cards that we always have with us where we keep things like the format of Ratio's and key calculation pro formas but how many of us have gone into an exam and been faced with a set of accounts with a question asking for analysis and been caught trying to think of all of the relevant ratio's to use.
This one is not the actual ratio itself which you no doubt have memorised but just a list to run through in your head of ratios that you should consider in the answer (there are other ratios but these this list is a good one to remember... And I'm quite proud of managing to come up with this Mnemonic from the letters that I had availble... Bit like coming up with a word in scrabble using all the letters that you have... Thankfully the Quick Ratio is also the Acid Test ratio otherwise I might have been in trouble coming up with a Mnemonic for this one).
Anyway, this Mnemonic is a handy list to run through when faced with such questions.
The Mnemonic is C DEAD PIG PORRAIGE
C - Current Ratio
D - Dividend Yield
E - Earnings Yield
A - Asset Turnover
D - Dividend Cover
P - Payable Days
I - Inventory Days
G - Gross Profit
P - P/E Ratio
O - Operating Profit
R - Return On Capital Employed
R - Receivable Days
A - Acid Test (Quick) Ratio
I - Interest Cover
G - Gearing
E - Earnings Per Share (EPS)
Hope that it helps someone at some stage in an exam scenario.
More thrilling Mnemonics tomorrow.
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
