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Organizations typically document procedures in their published policy and procedures guide, or their standard operating procedure (S.O.P.) guide. A procedures manual or procedural manual typically gathers together a number of procedures used within an organisation, [3] or for a specific set of functions. [4]
A standard operating procedure (SOP) is a set of step-by-step instructions compiled by an organization to help workers carry out routine operations. [1] SOPs aim to achieve efficiency, quality output, and uniformity of performance, while reducing miscommunication and failure to comply with industry regulations .
Greenwood et al. (1990) [6] defined the audit firm as, "a professional partnership that has a decentralized organization relationship between the national head office and local offices". Local offices can make most of the managerial decisions except for the drawing up of professional standards and maintaining them.
According to the Institute of Cost and Management Accountants, cost audit is "an examination of cost accounting records and verification of facts to ascertain that the cost of the product has been arrived at, in accordance with principles of cost accounting." [citation needed]
The operations manual is the documentation by which an organisation provides guidance for members and employees to perform their functions correctly and reasonably efficiently. [1] It documents the approved standard procedures for performing operations safely to produce goods and provide services. [ 2 ]
Substantive procedures (or substantive tests) are those activities performed by the auditor to detect material misstatement at the assertion level. [1]Management implicitly assert that account balances and disclosures and underlying classes of transactions do not contain any material misstatements: in other words, that they are materially complete, valid and accurate.
Analytical procedures include comparison of financial information (data in financial statement) with prior periods, budgets, forecasts, similar industries and so on. It also includes consideration of predictable relationships, such as gross profit to sales, payroll costs to employees, and financial information and non-financial information, for examples the CEO's reports and the industry news.
Salary can also be considered as the cost of hiring and keeping human resources for corporate operations, and is hence referred to as personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts. [1] A salary is a fixed amount of money or compensation paid to an employee by an employer in return for work performed.