July 2019
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Financial Analysis for Auditors

Financial Analysis for Auditors – Manjit Biant

Making sense of numbers and how they relate to financial audits. What the numbers mean and how to conduct more effective and cost productive audits.

Full Seminar Description
In this two-day seminar we will explore financial statements as they relate to financial audits.

We will review the financial statements to see how they can provide indicators of where the money is and what it does.

We will cover ratio analysis tools that can be used for analysing the balance sheet to pinpoint areas of high risk, and discover the critical relationship between the income statement and the organization’s operations.

We will investigate ways to uncover inappropriate accounting practices and identify potential fraudulent transactions.

This training program will provide you with value-added skills that will help you identify risk areas in all aspects of the audit process.

Objectives

To better equip accountants and those involved with auditing to be better skilled in identifying irregularities and in providing better and more cost effective audits.

• Use financial statements to understand and assess business performance and identify risk
• Calculate and interpret key financial ratios
• Understand what is meant by creative accounting, how it is carried out and its implications for businesses
• Identify early warning signs within a business using financial statements
• Analyse cash flow forecasts and business plans to assess future strategies and plans and associated risks

Who Should Attend
Financial, Operational, Information Technology and Compliance Audit Staff and Managers

Agenda
1. Accounting 101
• Financial Analysis: The Auditor’s Perspective , how auditors can use financial analysis
International Accounting Standards Board
• International Financial Reporting Standards
• Sabanes Oxley & Other Corporate Governance issues
• Value-based approach vs traditional auditing
• Using financial information to identify control and business risks

2. The Balance Sheet
• a snapshot in time
• financial analysis techniques
• auditing the Balance Sheet
3. The Statement of Income
• understanding the Statement of Income
• financial analysis techniques
• auditing the Statement of Income
4. Statement of Cash Flows
• the Statement of Cash Flows
• operating activities
• investing activities
• financing activities
• who cares about a Cash Flow Statement
• example of a Cash Flow Statement
• profit versus cash flow – essential differences
5. Ratio Analysis
• liquidity ratios
• profitability ratios
• leverage ratios
• turnover ratios
6. Impact of Changes in Working Capital
• measuring working capital
• negative working capital
• understanding working capital
evaluating the management of working capital
impact of operating decisions on working capital

7. Notes to the Financial Statement
• annual reports and Form 10-Ks
• the auditor’s report
• financial statement reports
8. Fraudulent Transactions
• cooking the books
• fraud tips
• fraud detection and prevention techniques
• key problem areas and early warning signs – what to look for from a risk perspective
• Enron – how they conned everyone

9. Using Financial Analysis

• where to focus audit resources
• analysis techniques in risk assessment audit planning, fieldwork, and reporting
• using analytical techniques to improve risk assessment

10. Analysing budgets, forecasts and business plans

• What to look for in a business plan
• Understanding and sensitising key budget assumptions
• Analysing costs – fixed, variable, and stepped – and calculating break even
• Camouflaging the numbers – how it’s done and how to spot it

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