I have had small clients before that utilizes spreadsheets like mirosoft excel (or even worse, manual journals) to record accounting transactions, out of which they prepare financial reports.
Why not yet automated? There can be three possible reasons:
- Their transactions can be very simple and volume of transactions very low that it renders more efficient to use spreadsheets rather than use any simple software (like a GL system) available in the market, to process those transactions;
- They don’t have enough fund to invest in a fully licensed GL system; or
- A conservative accountant who’s not willing to adopt the latest technology.
Sad to note, though, that the last reason is often the case for these companies, or maybe a combination of any or all of the three, but that the third is oftentimes present.
For companies that cannot afford a system, especially for those that are on the start-up phase yet, Microsoft has the latest (announced just this week!) special offer:
Reviewing the prior year working papers, I found myself reading this documentation (and I’m quoting it verbatim):
At present time the client accounting department have no in place processes to identify significant changes in generally accepted accounting principles promulgated by relevant authoritative bodies , the client alternatively is to consult with the auditors regarding that and to consult with the group.
Relevant authoritative bodies like the IASB do not promulgate generally accepted accounting principles. Instead, they promulgate accounting standards based on accounting principles that will yield comparable results and reports among companies especially in the same industries.
Generally Accepted Accounting Principles (GAAP) are the principles developed and adopted through norms and thus generally accepted, while accounting starndards like the IFRS are a means to formalize and document such general principles.
The following movie is a spoof of an Arnold Schwarzenegger movie trailer. It is using youtube, so for those who have youtube blocked in their office internet, I’m sorry, I really can’t help you with that. I guess you might have to wait when you can browse through an open access internet. Yet, I really recommend that you watch this because it is very hilarious!
Thanks to Tina Smith for referring this video to me.
A new version of “Financial Accounting I” has already been released by Atty. Conrado T. Valix and Jose Peralta. It incorporates the new standards: Philippine Accounting Standards, Philippine Financial Reporting Standards, International Accounting Standards, and International Financial Reporting Standards.
The book has a whole new different look.