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Showing posts from April, 2007

Professional Body

The definition of Professional Body from Reference.com


"A professional body or professional organization, also known as a professional association or professional society, is an organization, usually non-profit, that exists to further a particular profession, to protect both the public interest and the interests of professionals. The balance between these two may be a matter of opinion. On the one hand, professional bodies may act to protect the public by maintaining and enforcing standards of training and ethics in their profession. On the other hand, they may also act like a cartel or a labor union (trade union) for the members of the profession, though this description is commonly rejected by the body concerned."

The first half of the definition is very sweet and text book type definition what the public knows about and second is what the professional body does.

I am writing this blog in particular reference to Indian Accounting bodies.

There was a reference by RV in CMA …

Learning Curve Theory

Learning Curve Theory is concerned with the idea that when a new job, process or activity commences for the first time it is likely that the workforce involved will not achieve maximum efficiency immediately. Repetition of the task is likely to make the people more confident and knowledgeable and will eventually result in a more efficient and rapid operation. Eventually the learning process will stop after continually repeating the job. As a consequence the time to complete a task will initially decline and then stabilise once efficient working is achieved. The cumulative average time per unit is assumed to decrease by a constant percentage every time that output doubles. Cumulative average time refers to the average time per unit for all units produced so far, from and including the first one made.

Major areas within management accounting where learning curve theory is likely to have consequences and suggest potential limitations of this theory.


Areas of consequence:
A Standard Costing

Profit Smoothing....

It is now the year end for many companies and the accountants will very busy finalising their company's accounts. You may be very busy to read all of it but I would write in this article... you may find it informative.

Creative Accounting is a dirty word in accounting .... but the world 'creative' is good in the real world. So year end... and companies want to present a very good picture of state of affairs of the company to their shareholders... and the directors would expect that their accountant workout their creative minds in this definitive purpose.... This practise is know as 'Profit Smoothing'

Some of the common methods:

Setting up a provision for possible future expenditure. This was then taken to the profit and loss account artificially to enhance profits in the subsequent periods.Recognising profits on long term contracts before they are completed provides opportunities for profit smoothing.Extraordinary items are large unusal items from items from ev…

Valuing Stocks

The basic rule is that "stocks are valued at the lower of cost or net realisable value." Sometimes I get confused when the scenario is asked in a different way. Here are two scenarios that I want you to attempt:


Value the following items of stock:

Material costing $12,000 bought for processing and assembly for a profitable special order. Since buying these items, the cost price has fallen to $ 10,000.Equipment constructed for a customer for an agreed price of $ 18,000. This has recently been completed at a cost of $ 16,800. It has now been discovered that, in order to meet certain regulations, conversion with an extra cost $ 4,200 will be required. The customer has accepted partial responsibility and agreed to meet half the extra cost.What are your answers ? I am sure that you will get it right. Respond as comments on the blog.

Answer 1 : Value of Material is _____

Answer 2: Value of Equipment is _______

Give reasons for your answer..

Regards,

Santosh Puthran
AICWA

RSS feed how it helps you

Look out for RSS or Atom on website and you can subscribe to the feeds of their websites.

So when ever their websites are updated, you will see on your RSS reader to whichever feeds your subscribed. For e.g on our blog http://www.managementaccountant.in , we have subscribed to RSS feeds of Economic Times, Financial Times, Times of India. So when the feeds are updated by the service provider, it shows up on our blog. This gives a reader a snapshot of updates on all the sites subscribed and then he can make a choice which one to visit. Similarly you can subscribe to our blog by clicking on
Subscribe to: Posts (Atom) which is at bottom of the blog. So whenever there is an update on our blog, you will know it instantly. So no need checking the website now and again

For more details visit http://en.wikipedia.org/wiki/RSS_(file_format)

If you are a :

yahoo user, then configure your http://my.yahoo.com and ADD content by RSS
google user, then visit http://www.google.com/reader . It would be a g…

Do you have your passports ready ?

I came across one of the emails circulated in the yahoogroup by Jatin

"Dear Fellow Cost Accountants

I always wanted an opportunity in IT; not because it pays more - but it is one which gives more Job satisfaction. Atleast you are not doing the same job again and again.

Each time its a new client and perhaps a totally new solution. I am yet to get into this world myself though. However I plan to share this unique opportunity that is being offered by a company called proteus (www.proteus-it.com)

They are asking for CA / ICWA with relevant accounting / costing experience of 3-5 years to join them. A expert team of consultants shall be responsible for grooming the consultants.

However they are very keen on the specific experience. My friends with audit and banking experience were turned down. I thought what they had to share did sound reasonable to me..... well those of you interested could write to careers[at]proteus-it.com and check out
whether you can also be considered. Wish you a…