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Financial Reviews Tasks

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  • Financial Reviews Tasks

Profit and Loss Account (Income Statement)

  • Revenue Recognition:
    • Accuracy and timeliness of revenue recognition
    • Compliance with accounting standards (e.g. US GAAP)
    • Consistency in revenue recognition practices
  • Expense Recognition:
    • Proper classification and allocation of expenses
    • Accuracy of expense accruals and provisions
    • Adequacy of expense documentation
  • Gross Profit Margin:
    • Analysis of gross profit margin trends
    • Identification of factors affecting gross profit margin
  • Operating Expenses:
    • Review of operating expense categories (e.g., selling, general, and administrative expenses)
    • Identification of cost-saving opportunities
    • Analysis of operating expense ratios
  • Net Income:
    • Calculation and analysis of net income
    • Impact of non-operating income and expenses
    • Comparison with industry benchmarks and historical performance

Balance Sheet

  • Asset Valuation:
    • Accuracy of asset valuations (e.g., property, plant, and equipment, inventory, investments)
    • Impairment testing and write-offs
    • Adequacy of asset depreciation and amortization
  • Liability Recognition:
    • Accuracy of liability recognition (e.g., accounts payable, accrued expenses, long-term debt)
    • Provision for doubtful debts and other contingencies
    • Compliance with debt covenants and other contractual obligations
  • Equity:
    • Analysis of shareholder equity components (e.g., share capital, retained earnings)
    • Review of dividend policies and distributions
    • Impact of share-based payments
  • Working Capital:
    • Analysis of working capital components (e.g., current assets, current liabilities)
    • Assessment of liquidity and solvency
    • Identification of potential cash flow issues

General Ledger (GL) Scrutiny

  • Account Reconciliation:
    • Accuracy and completeness of account reconciliations
    • Timely resolution of reconciling items
    • Identification of potential errors or discrepancies
  • Transaction Review:
    • Review of unusual or large transactions
    • Verification of supporting documentation
    • Identification of potential fraud or errors
  • Chart of Accounts:
    • Review of the chart of accounts for accuracy and consistency
    • Identification of opportunities for improvement
  • Internal Controls:
    • Assessment of internal controls over financial reporting
    • Identification of control weaknesses and recommendations for improvement

Cash Flow Statement

  • Operating Activities:
    • Analysis of cash flows from operating activities
    • Identification of trends in working capital
    • Assessment of the impact of non-cash items
  • Investing Activities:
    • Review of cash flows from investing activities
    • Analysis of capital expenditures and asset disposals
    • Assessment of investment decisions
  • Financing Activities:
    • Analysis of cash flows from financing activities
    • Review of debt and equity financing activities
    • Assessment of dividend payments and share repurchases

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