Last October 24 and 25, 2018, Mazars in Qatar conducted training for our financial auditors to learn the latest Mazars Audit Methodology and other developments in Audit and Accounting practices
Very exciting day today. Our IT auditors Dindo Geron and Salman Younus conducted training today November 23 2017 at Mazars Qatar office for our financial auditors how to conduct an IT General Controls (ITGC) audit for their clients. Hopefully our auditors gained knowledge to conduct IT General Controls audit by themselves.
The second part of this training was about audit programs and other working papers and methodologies used in conducting an IT General Controls audit.
Institute of Internal Auditors (IIA) Qatar Chapter conducted a seminar on “Similarities and differences between Internal Audit & ERM - Risk Assessment process” at the Oryx Rotana recently. One of the speakers was our own Mr. Hatem Elsafty, Mazars Partner. He is currently leading the practice of Governance Risk & Internal Controls within Mazars Qatar.
By Doug & Polly White, ENTREPRENEUR.COM
Most entrepreneurs start organizations because they are passionate about the primary work of the business -- which usually isn’t accounting. This means that most entrepreneurs aren’t completely comfortable interpreting the monthly financial reports they receive.
We have met hundreds of entrepreneurs who never look at their profit and loss statements because they do not understand them and explanations have been too complicated. While we can’t teach you to be a CPA, we can give you some basics that will help you with this important financial tool.
All P&Ls are based on a very simple formula -- sales minus costs equals profit. It really is that simple. Everything else is a matter of breaking out sales or cost into more detail and adding subtotals. Sales are typically shown at the top of the P&L. Costs are shown below sales and profit is at the bottom. You may see a number of subtotals as you look down the column, but it is still sales minus costs equal profit.
Unfortunately, we sometimes use different words for sales, costs and profits. This can make accounting seem more difficult than it really is. For example, sales can also be called revenue or income. Costs may be called expenses and profits may be referred to as net income. In fact, the P&L itself can also be called an income statement. All of these AKAs can be confusing, but don’t let it throw you. A rose by any other name …
Your company’s sales may be broken into several different sources. For example, the sales of a restaurant may come from customers who dine in or take out or from catering. Such a business may choose to break sales into those three pieces. Typically, these three components would be added together in a line called total sales.
Similarly, costs are usually broken into various components. For example, you may see material costs, labor costs and overhead broken out separately. There are an infinite number of ways to break out costs, but once you get below the total sales line everything else you see is a cost, broken out in one way or another.
One of the most useful ways to subdivide costs is into those costs that are directly associated with delivering your product or service and those that are not. Consider a company that makes and sells different types of widgets. It will have the cost of the components used to make the widgets, the cost of the workers who assemble the widgets and the costs of the production facility. These costs are referred to as cost of goods sold (COGS) because they can be tied directly to the production of widgets.
In a service business, this is called the cost of service (COS). For example, a lawn maintenance service would include the cost of the employees who do the work, fuel costs and the cost of other supplies such as fertilizer and grass seed.
Sales minus COGS is known as gross profit (or gross margin). This is the money the business earns after it subtracts the cost of delivering its product and/or services. It is also the money needed to cover the other costs associated with running the business and still generate a profit.
Other costs of the business are not associated with the production of widgets. Such costs might be the cost of the people who sell the widgets, the cost of the accountants who produce the P&Ls and even the president’s compensation. These costs are most often referred to as selling, general and administrative costs (SG&A). With this addition, the P&L is now broken down into two parts: sales minus COGS equals gross profit, and gross profit minus SG&A equals profit.
If you have been filing your P&Ls away without reading them, you are not alone. However, understanding your P&L is essential to being able to run your business successfully.
A good accountant can be your company’s financial partner for life—with intimate knowledge of everything from how you’re going to finance your next forklift to how you’re going to pay for your daughter’s college education.
While many people think of accountants strictly as tax preparers, in reality, accountants have a wide knowledge base that can be an invaluable asset to a business.
A general accounting practice covers four basic areas of expertise:
1. Business advisory services. This is where accountants can really earn their keep. Since the accountant is knowledgeable about your business environment, your tax situation and your financial statements, it makes sense to ask them to pull all the pieces together and help you come up with a business plan and personal financial plan you can really achieve. Accountants can offer advice on everything from insurance to expansion. Accountants can bring a new level of insight to the picture, simply by virtue of their perspective.
2. Accounting and record-keeping. Accounting and record-keeping are perhaps the most basic accounting discipline. However, most business owners keep their own books and records. The reason is simple: If these records are examined by lenders or the IRS, the business owner is responsible for their accuracy; therefore, it makes more sense for the owner to maintain them.
Where accountants can offer help is in initially setting up bookkeeping and accounting systems and showing you how to use them. A good system allows you to evaluate your profitability at any point in time and modify prices accordingly. It also lets you track expenses to see if any areas are getting out of hand. It lets you establish and track a budget, spot trends in sales and expenses, and reduce accounting fees required to produce financial statements and tax returns.
3. Tax advice. Tax help from accountants comes in two forms: tax compliance and tax planning. Planning refers to reducing your overall tax burden; compliance refers to obeying the tax laws.
4. Auditing. Auditing services are required for many different purposes, most commonly by banks as a condition of a loan. There are many levels of auditing, ranging from simply preparing financial statements from figures that the entrepreneur supplies all the way up to an actual audit, where the accountant or other third party gives assurance that a company’s financial information is accurate.
Choosing an Accountant
The best way to find a good accountant is to get a referral from your attorney, your banker or a business colleague in the same industry. If you need more possibilities, almost every state has a Society of Certified Public Accountants that will make a referral.
Don’t underestimate the importance of a CPA. This title is only awarded to people who have passed a rigorous two-day, nationally standardized test. Most states require CPAs to have at least a college degree or its equivalent, and several states also require post-graduate work. When dealing with an accountant, you can only hope they're well-educated and well-versed in your business’s needs. Passing the CPA exam, however, is a guarantee of a certain level of ability.
Once you've come up with some good candidates (five is a good number to start with), a little preparation is in order before you interview them. The first step is to take an inventory of what you'll need. It's important to determine beforehand just how much of the work your company will do and how much of it will be done by the accountant.
Once you've given some thought to your expectations, you’re ready to interview. Your principal goal is to find out about three things:
1. Services. Most accounting firms offer tax and auditing services. But what about bookkeeping? Management consulting? Pension fund accounting? Estate planning? Will the accountant help you design and implement financial information systems? Other services a CPA may offer include analyzing transactions for loans and financing; preparing, auditing, reviewing and compiling financial statements; managing investments; and representing you before tax authorities.
Make sure the firm has what you need. If it can’t offer specialized services, such as estate planning, it may have relationships with other firms to which it can refer you to handle these matters. In addition, make sure the firm has experience with small businesses and with your industry. Someone who's already familiar with the financial issues facing your field of business won’t have to waste time getting up to speed.
2. Personality. Is the accountant’s style compatible with yours? Be sure the people you're meeting with are the same ones who'll be handling your business. At many accounting firms, some partners handle sales and new business, then pass the actual account work on to others.
When evaluating competency and compatibility, ask candidates how they'd handle situations relevant to you. For example: How would they handle a change in corporation status from S to C? Or an IRS office audit seeking verification of automobile expenses? Listen to the answers, and decide if that’s how you would like your affairs to be handled.
3. Fees. Ask about fees upfront. Get a range of quotes from different accountants. Also try to get an estimate of the total annual charges based on the services you've discussed. Don’t base your decision solely on cost, however; an accountant who charges more by the hour is likely to be more experienced and thus able to work faster than a novice who charges less.
At the end of the interview, ask for references—particularly from clients in the same industry as you. A good accountant should be happy to provide you with references; call and ask how satisfied they were with the accountant’s services, fees and availability.
The Institute of Internal Auditors Qatar in association with The Scientific Accounting Association (SAA) hosted a very successful Fifth National Conference on Internal Auditing at The Grand Hyatt hotel, Doha - Qatar from 31 May to 2 June 2015.
The conference with the theme “Auditing Matters” was attended by a large number of dignitaries and more than 400 delegates including Auditors from Bahrain, UAE, Kuwait, Lebanon and Saudi Arabia.
One of the valued sponsor was Ahmed Tawfik & Co. CPA - Mazars for this great event. Other sponsors were Qatar National Bank, Qatar Rail and Price Waterhouse Coopers, Deloitte, Protiviti, KPMG, Moore Stephens, BDO and Teammate, Thomson Reuters, Al-Najar, PRC, Bahwan Cybertek and Al-Sayed Accounting. Qatar University is our Academic Partner and The Audit Bureau Qatar our Strategic Partner.
The three day event had 32 international speakers addressing the delegates in 15 sessions and 6 workshops on topics relevant to the theme of the conference, “Auditing matters”, with reference to COSO (Committee of Sponsoring Organizations) framework on Internal Control.
Ahmed Tawfik & Co. CPA has been approved by QFC ( Qatar Financial Centre ) as registered auditors effective 15 December 2014. We are glad to provide auditing and taxation services to any client registered under QFC.
by Sara Silverstein
Excel pivot tables are incredible tools that allow you to analyze large data sets many different ways in seconds.
An audit isn’t usually something that the financial staff of a nonprofit looks forward to. Auditors scrutinize their work, ask them questions and prevent them from performing their normal responsibilities. But by properly preparing for your audit, you can reduce the stress on both yourself and your auditor.
1. Have documentation ready.
One of the most important steps that an organization can take is to have accounting records up to date, accurate and organized. Often times the auditor will provide the organization with a list of items needed for the audit. By providing these items to your auditor at the beginning of audit fieldwork, in an organized manner, it will reduce the number of times your auditor will have to ask you for additional information. It is also beneficial to ask your auditor in what format they would prefer to receive the documentation (paper, Excel, PDF, etc.).
2. Reconcile all accounts.
This may seem obvious but make sure all of your bank accounts have been reconciled to both the bank statement and trial balance. Also make sure significant accounts listed on your trial balance have proper supporting schedules that agree to the trial balance.
3. Take an inventory of fixed assets.
Did you purchase any new fixed assets during the year or dispose of any old ones? Make sure you take an inventory of all of your fixed assets at year end and update your fixed asset listing for any current year activity.
4. Inform your auditor of any unusual items.
Did anything unusual happen during the year? Did you receive an unusual source of revenue and weren’t sure where to record it so you buried it in contributions? Tell your auditors of anything unusual that happened during the year at the start of the audit. Don’t wait for them to find it.
5. Review internal controls.
As part of the audit procedures, auditors are required to understand your organization’s internal controls. Make sure you have your internal controls documented and review them each year for any changes. This will save you from the auditors having to ask you to update it.
6. Be available for questions.
The length of fieldwork varies and could last several days. During this time the auditors may need to ask you questions. It is important that key employees be available during the time the auditors are in your office so the fieldwork and the audit are not held up.
Spending time preparing for your audit beforehand can highlight potential issues that can be resolved before audit fieldwork, thus making for a smoother audit.
by Carrie Minnich, DWD