Transfer pricing is the setting of the price for goods and services sold between controlled or related legal entities within an enterprise. For example if the subsidiary company sells goods to the parent company the cost of those goods paid by the parent to the subsidiary is the transfer price.
This is an independent board therefore organizational independence is achiewed
Enforces internal audit recommendation
Time factor – lack quality time to support the internal audit activity on day to day basis as an Independent reporting facility. Audit committee meets on average four times a year
Their functions are parallel – the audit committee is apart from the main stream … Read the rest
The sales budget is one of the important functional budgets. Sales estimate is the commencement of budgeting that may be made in quantitative terms. The sales budget is primarily concerned with forecasting of what products will be sold in what quantities and at what prices during the budget period. The sales budget is prepared by the sales executives taking … Read the rest
Costs stay in the work-in-process account throughout the job. When the job is finally completed, they are transferred to the finished goods account. By using this method, accountants can make sense of complicated jobs that are moving towards the process of completion.
budgetary slack is the process by which managers seek to obtain the budget targets that can easily be achieved by either understating revenues and/or overstating costs. Some of the ways in which budgetary slacks arise include the following:
Distinction between fixed budget and flexible budget Fixed budget Flexible budge
fixed budget does not change with the volume of activity 1. It can be recast on the basis of volume of cost.
2. All costs are related to one level of activity only. 2. Costs are analysed by behaviour and variable costs are allowed as per activity attained.
3. … Read the rest
Job costing may be defined as a system of costing in which the elements of cost are accumulated separately for each job or work order undertaken by an organization. Industries which manufacture products or render services against specific orders use job costing or job order method of cost accounting. In the job costing system, an order or a unit, lot … Read the rest
