Introduction to Finance, Accounting & Auditing

What is accounting? What is finance?

What is financial accounting?

Module 1: Accounting Concept and Principles

Relevance, Reliability, Matching Concept, Timeliness, Neutrality, Faithful Representation, Prudence, Completeness, Single Economic Entity Concept, Money Measurement Concept, Comparability/Consistency, Understandability, Materiality, Going Concern, Accruals, Business Entity, Substance over Form, Realization Concept, Duality Concept

Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements.

• Published Annual Reports for stockholders
• The role of external Auditor in Holding/Subsidiaries establishments
• Distinguish between the different types of opinions given in audit reports
• Why the company needs Internal Auditor although it has external auditor

Module 2: The Financial Statements

• The key elements of financial statements defined and explained
• Assets – current and non-current
• What is depreciation? – explanation of their impact on profit
• Liabilities – current and non-current
• Company net worth
• How is profit calculated?
• The difference between revenue and capital expenditure
• Profit or cash – what is the difference?

Module 3: Basic Evaluation of Financial Statements

• Why do we need to evaluate financial statements?
• Who are the stakeholders and what are their information needs?
• Financial analysis tools:
• Vertical Analysis
• Horizontal Analysis
• Trend Analysis
• Ratio Analysis
• How to calculate accounting ratios
• How to use ratio analysis to assess performance
• Profitability ratios
• Related KPI for finance; profit margins, ROI, asset turnover, average number of days inventory held, etc.
• Liquidity ratios
• The meaning of working capital
• Operating efficiency ratio
• Gearing ratios
• The Cash Flow Cycle and Working Capital
• Valuing a company – Book Value versus Market Value

Module 4: Introduction to Costing Systems

• What is management accounting?
• Collecting and analyzing costs
• Types of cost analysis: by type, by location, by behavior, by purpose
• What are overheads, and how should we analyze them?
• What is the Cost of Production – Marginal and Total Costing explained
• What is inventory, and how does it affect the cost of production?
• Methods of valuing inventory – FIFO, LIFO, and AVCO explained
• How to measure the break-even point and the margin of safety
• Why do we need budgets? – the link between corporate strategy and operations at all levels of the organization
• The benefits & limitations of budgets
• The key features of budgets
• Basic budget forecasting techniques
• How to prepare a departmental budget
• Comparing actual performance with the budget – Variance Analysis

Module 5: Budgets

• Why do we need budgets? – the link between corporate strategy and operations at all levels of the organization
• The benefits & limitations of budgets
• The key features of budgets
• Basic budget forecasting techniques
• How to prepare a departmental budget
• Comparing actual performance with the budget – Variance Analysis