Meaning of policy Policies are documented steps necessary for an organization, individuals, or group of individuals to ensure that the organization’s overall goals are being achieved. Many times policies may involve certain sets of decisions to ensure solving a long-term purpose for any particular problem. Policies simply outline what needs to be done, who is […]
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In business practices, when an auditor undertakes an auditing engagement, they have to measure and evaluate their independence and reliance on objectivity to the undertaken task. Their independence and adherence to objectivity ensure success in auditing efficiently and effectively. The auditor’s independence is highly objective and critical to the continuation of the audit in a
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An advocacy threat can occur when a firm does work that requires acting as an advocate for an entity related to an engagement. Furthermore, in an antagonistic or promotional situation, backing management’s viewpoint. For example, it serves as an entity’s legal advocate in a lawsuit or a regulatory probe or plays an active role in
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When auditors encounter the risk of assessing their own work, this is known as the self-review threat. Apart from their basic services, audit firms frequently offer other services. Accounting, valuation, taxation, and internal audit are some of its examples. When an auditor is required to review work that they previously completed, a self-review threat may arise. For
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Introduction In the past, it had been well seen that recessions and credit crunch may lead to the non-availability of cash reserves to the companies even though they may have some prospective business opportunities. This creates a mismatch between demand and supply of funds for business buyers and sellers. These situations have given rise to
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Cost Leadership Meaning When a company has the lowest cost for running its business operations compared to its peers, it is known as cost leadership for the company. This cost leadership arises due to the company’s scale of operations, the efficiency of operations, the size of the company, and the overall learning curve rate for
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What is a Consignment Inventory? Consignment inventory refers to an inventory arrangement that results from an agreement. This agreement mostly specifies that one party must hold inventory for another party for a specific purpose. In this regard, the main objective of the holder is to sell the inventory on the behalf of the initial owner
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Economy Pricing Strategy can be defined as a method of pricing which involves a lower price assigned to a product as a result of decreased production costs. This pricing strategy is adopted by businesses in order to make generic and commodity-related products more consumer-centric in terms of lower prices. The main rationale is to provide
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Definition of Portfolio at Risk Portfolio at Risk can be defined as a ratio that is mostly used in microfinance institutions, or banks in order to measure the quality of loans, as well as the risk that exists on the financial statements pertaining to these recoverable. Portfolio at Risk is considered to be an important
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What is meant by Write-Off? The write-Off is the process of removing a certain asset, or a transaction from the financial statement, as a result of the inability of the particular transaction to move forward as planned. In this regard, it is important to consider the fact that the process of eliminating a given item
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