Accounting

Why should I hire an accountant?

Processes like preparing financial statements and analyzing them become less daunting with an expert on your side.

How can I obtain meaningful insight into future cash flows?

You can obtain meaningful insights through projected financial statements. They allow seeing how variable assumptions in one period will affect future cash flows and making adjustments as necessary.

Why do shareholders need financial statements?

Financial statements provide a snapshot of a company’s financial health, giving insight into its performance, operations, and cash flow. Financial statements are essential since they show information on a company’s revenue, expenses, profitability, and debt.

Why is this needed when conducting a financial ratio analysis?

Ratio analysis is critical for helping you understand financial statements, identifying trends over time, and measuring your business’s overall financial state. Besides, lenders and potential investors often rely on ratio analysis when making lending and investing decisions.

What is a compilation engagement (notice to reader)?

Included with the financial statements prepared is a report called a notice to the reader stating that the financial statements are unaudited and that the CPA does not assure that the amounts are free from material misstatements.

When to write a due diligence report?

Typically, due diligence reports are necessary before enacting a business transaction. They are critical in business valuation, real estate development, or sales or acquisition. Due diligence is required when making capital expenditures or high-level investments.

What is an assurance review?

An assurance review is a specifically tailored report made to meet the needs and requirements of a company. This line of thought from an independent expert provides a strong signal that the company reports are trustworthy.

What is the difference between budgeting and financial forecasting?

Budgeting quantifies the expectation of revenues that a business wants to achieve for a future period. In contrast, financial forecasting estimates the amount of gain or income expected to accomplish in the coming period.

What is the end-of-period-adjustments in accounting?

End-of-period-adjustments are accounting journal entries made to the accounts of a business before preparing and distributing the financial statements for a given accounting period.

Why is reconciliation necessary in accounting?

Reconciliation is an accounting process that ensures that the actual amount of money spent matches the amount shown, leaving an account at the end of a fiscal period. Individuals and businesses perform reconciliation at regular intervals to check for errors or fraudulent activity.