Current asset turnover ratio – meaning and formula

reason why absolute assurance is impossible in auditing

The current assets turnover ratio ascertains the efficiency with which current assets are used in a business. This ratio is strongly associated with the efficient utilization of cash, receivables, and inventory. A higher value of this ratio indicates greater circulation of current assets while a low ratio indicates a stagnation of the flow of current assets. read more

Auditor – meaning

Auditor - meaning

The auditor is the name of the person who conducts the audit, usually the engagement partner or other members of the engagement, or, as applicable to the firm.

The auditor is responsible for planning, collecting audit evidence and issuing the audit reports. For financial statement audits, the auditor is usually someone with a qualification in financial accounting and who is approved by a professional body or laws to practice auditing. read more

Engagement partner – meaning

Engagement partner - meaning

The engagement partner is the partner or another person in the audit firm who is responsible for audit engagement and its performance, and for auditor’s report that is issued on behalf of the firm, and who were required, has the appropriate authority from a professional, legal or regulatory body. read more

The precondition for an audit – meaning

The precondition to audit - meaning

The precondition to audit are conditions in which auditors must satisfy themselves that they are complied with before accepting the audit engagement.

There ate two preconditions for an audit:

First, the audited client must use the acceptable financial reporting framework in the preparation of its financial statements. An acceptable financial reporting framework involves the use of acceptable accounting standards such as IFRS, IPSAS, and GAAP depending on the nature of the audited entity and the laws and regulations in which the entity operates. read more