What are the accounting records?
Accounting records are documents and support materials used by individuals and companies in the preparation of financial statements, tax documents, etc. According to the law, the company is obliged to make such records for a specified period of time, often seven years to make it available for inspection and audit. Companies traded publicly may be subject to random inspections of regulatory agencies, and these inspections include review of accuracy and complete accounting records.
These records can be electronic, paper or a combination of both. They include any financial transaction documentation, from wage records to prints at the end of the day from money registers. Bank statements are also included in accounting records along with similar investment statements. Accounting books are also considered accounting records. In principle, if it contains a record concerning the company's financial activity, it is an accounting record.Ted to leave this documentation in good operating status. Accounting and Supporting EmploymentNCI usually oversees the maintenance of these records and uses documents in preparing things such as investors and tax statements. If the records are not complete, the financial statements made by companies will be inaccurate and this may be a reason for legal and financial sanctions.
procedures known as the generally accepted accounting principles (GAAP) must be observed when maintaining, handling and using accounting records. These procedures standardize basic accounting tasks to ensure that they are carried out evenly by all accounting, which eliminates the possibility of using so -called "creative accounting" to hide losses and otherwise distort financial facts for personal benefits.
When the audit is ordered, all accounting records are required for review. Auditors Buddate on the material and take note of any missing material, confusing records or records maintained incorrectly. All these inferOrmation is considered to develop the opinion on the audit. Regulatory bodies that are interested in financial procedures can review the results of the audit and collect information. This information can be used to prosecute companies suspected of fraudulent accounting procedures or to the liberation of companies facing such accusations.
Individuals are usually advised to keep accounting records because they can be audited by tax authorities. If people do not have records to support their taxes, they may be subject to sanctions. Their tax liability can be at least modified, which forces them to pay more taxes. If their records seem fraudulent, rather than simply sloppy, they may face legal sanctions.