Home  Journals  International Accounting  12(306) - 2014 March

Application of the CVP-analysis to assess the continuity of an auditee’s activities

Available online: 18 March 2014

Subject Heading: AUDITING

JEL Classification: 

Pages: 36-43

In the present-day conditions of independence of institutions and their responsibility for the results of their activities, the necessity of quantitative assessment of the continuity of a business entity as the most important assumptions of its functioning and financial reporting come into being. The accounting standards and the national standards of audit activities justify such a necessity. The article gives an overview of typical errors detected during the implementation of external quality control of the method of assessment of the continuity of the activities of the audited entity on the basis of calculation of indicators of the CVP-analysis. The example shows the peculiarities of using of the technique in the conditions of single- and multi-commodity industries. The author establishes an auditor’s working document.

Keywords: CVP-analysis, break-even point, point of closing, continuity, typical errors, auditee, auditor

References:

1. Grishchenko O.V. Upravlencheskii uchet: konspekt lektsii [Management accounting]. Taganrog, TSURE Publ., 2007.
2. Egorova I.S. Problematika otsenki nepreryvnosti deiatel'nosti audiruemogo litsa [Problems of assessment of the continuity of an auditee’s activities]. Auditor, 2013, no. 3.
3. Egorova I.S. Formirovanie rabochikh dokumentov pri otsenke dopushcheniia nepreryvnosti deiatel'nosti v audite [Formation of working documents in assessing the assumptions of continuity of activities in audit]. Mezhdunarodnyi bukhgalterskii uchet – International accounting, 2011, no. 30.
4. Resolution of the Government of the Russian Federation “The Applicability of the assumptions of continuity of the activities of the auditee” of September 23, 2002 № 696. Federal standard № 11. (In Russ.)

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ISSN 2311-9381 (Online)
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