COMMON SIZE FINANCIAL STATEMENT

COMMON SIZE FINANCIAL STATEMENT DEFINITION

• A common size financial statement displays all items as percentages of a common base figure. This type of financial statement allows for easy analysis between companies or between time periods of a company. The values on the common size statement are expressed as percentages of a statement component, such as revenue.
• The common size size ratio for each line on the financial statement is calculated as follows 

Common Size Ratio = Item of interest/Reference Item (item of interest divided by reference item)

Common Size Income Statement

• The income statement, also referred to as the profit and loss (P&L) statement, provides an overview of sales, expenses and net income. 
• The income statement equation is sales minus expenses equals net income. This is why the common size income statement defines all items as a percentage of sales.

Common Size Balance Sheet Statement

•  The balance sheet equation is assets equals liabilities plus stockholders' equity. As a result, analysts define the balance sheet as a percentage of assets.

Common Size Cash Flow Statement

•  The cash flow statement is divided between cash flows from operations, cash flows from investing and cash flows from financing.  
• The popular version of common size expresses cash flow in terms of total operational cash flow for items in cash flows from operations, total investing cash flows for cash flows from investing activities and total financing cash flows for cash flows from financing activities.

Source: Common Size Financial Statement Definition | Investopedia http://www.investopedia.com/terms/c/commonsizefinancialstatement.asp#ixzz4butX6FxV http://www.netmba.com/finance/statements/common-size/

TUGAS 2 AUDITING II

PERUBAHAN INTERNAL CONTROL FRAMEWORK MENURUT COSO

Menurut COSO framework, Internal control terdiri dari 5 komponen yang saling terkait, yaitu:

• Control Environment
• Risk Assessment
• Control Activities
• Information and communication
• Monitoring

Di tahun 2004, COSO mengeluarkan report ‘Enterprise Risk Management – Integrated Framework’, sebagai pengembangan COSO framework di atas. Dijelaskan ada 8 komponen dalam Enterprise Risk Management, yaitu:

• Internal Environment
• Objective Setting
• Event Identification
• Risk Assessment
• Risk Response
• Control Activities
• Information and Communication
• Monitoring

SOURCE : https://mukhsonrofi.wordpress.com/2008/10/14/pengertian-atau-definisi-coso/

TUGAS I AUDITING 2 ( INTERNAL CONTROL )

QUESTIONS :

1. What is internal control ?

2. Why in auditing we have to understand and examine the internal control of the entity ?

ANSWER

1. Internal control is a control process in an entitiy that do using all the resources to help manager or internal parties on improving, directing and monitoring all activities in the entity in purpose to provide reasonable assurance regarding to the objectives of the entity.

 There are 3 (three) purposes of entity based on COSO  (Committee of Sponsoring   Organizations of the Treadway Commission)

1.    Effectivity and efficieny on operational

2.    Reliability of financal report

3.    Compliance to the applicable laws

Based on COSO there are 5 (five) components in internal control :

1. Control environment

- atmosphere in the entitiy is made relevant to behavior standard in that entity

2. Risk Assesment

- identify the risk during process to achieve entity's goals

3. Control activities

- set the procedures to reduce the risk

4. Information and communication

- provide relevant and accurate information

5. Monitoring

- do an evaluation to make sure that every components in the entitiy are relevant to the objectives

2. In auditing we have to understand and examine internal control in the entity because the purpose of auditing is to find the failure of a financial report that not relevant to the standard and also to detect is there any fraud or not. Internal control help the auditor to detect and prevent fraud, so the entity can protect it assets that are tangible ( cash, fixed asset, inventory) and intangible (reputation, trademark). In Indonesia there is government regulation (Peraturan Bapepam-LK No.IX.I.7, Lampiran Keputusan Ketua Bapepam-LK No.Kep-496/BL/2008) that stated all auditors have to understand and implement internal control that applied by the entity where the auditor work for. I think that it will make auditor easy to do their job, with know how internal control system in that entity, the auditor will know the strengths and weakness of the system, know the condition of the entity, know what’s the problem and the auditor can know in what activity or in what kind of assets that has high risk (many possibilities to do fraud).

LARASATI NANDA RAHMALIA

C1L014021

references :

http://www.warsidi.com/2016/03/pengendalian-internal-intern-control-definisi-komponen-prinsip-coso-arti-pengertian-apa-yang-dimaksud.html

http://accounting.binus.ac.id/2015/09/25/pengertian-pengendalian-internal/