Warren Buffet’s Advice to Auditors

  • If the auditor were solely responsible for preparation of the company’s financial statements, would they have been prepared differently? And if “differently”, the auditor should explain both management’s argument and his own.
  • If the auditor were an investor, would he have received the information essential to understanding the company’s financial performance during the reporting period?
  • Is the company following the same auditor procedure that the auditor would if he himself were CEO? If not, what are the differences and why?

What questions do you have?

We are happy to help. Please post your comment below or call Paul Leonard, Partner at Cooney Carey, on 01 677 9000. Alternatively, send him an email: pleonard@cooneycarey.ie

If this article helped you, please share it with other businesses. 

Posted on March 26, 2018 by Paul Leonard

New Accounting Options For Year Ended 31 December 2017

IASSA and the Companies (Accounting) Act 2017 have provided companies with new options for accounting for their 31 December 2017 year ended accounts.

FRS 105 is now available for micro entity’s where 2 of the following 3 criteria apply for the current and proceeding year; turnover of less than €700,000, gross assets of €350,000 and less than 10 employees.

FRS 105 contains simpler accounting policies appropriate for smaller entities.

Section 1A of FRS 102 is now available for small entity’s where 2 of the following 3 criteria apply for the current and proceeding year; turnover of less than €12,000,000, gross assets of €6,000,000 and less than 50 employees.

Section 1A uses the same accounting policies as full FRS 102, however less disclosures are required.

The table below sets out the main differences between FRS 105, Section 1A of FRS 102 and full FRS 102.

What questions do you have?

We are happy to help. Please post your comment below or contact our friendly and knowledgeable team on 01 677 9000 or email: info@cooneycarey.ie

To keep in touch, connect with our friendly team on LinkedIn.

If you found this article interesting, please share it with other businesses. 

Posted on March 22, 2018 by Cooney Carey

Valuing Your Business

What approach to use: A valuation approach is the method used to determine the fair market value of a business.

The most common approaches are:

Market approach

The market approach is based on finding prices for comparable businesses or transactions in the public or private markets and using them to infer the value of the business or transaction. Two methods to determine the market value of a business are:

  • Current market value: applicable if stock is actively traded in the stock market.
  • Comparable: identify a publicly traded business with comparable characteristics and calculate multiples based on the performance

Income approach

The income approach is based on determining future earnings and calculating the present value. Two common approaches are:

  • Discounted cashflow method: Involves projecting future cashflows, income and expenditure. Calculating a terminal value and discounting them to present value.
  • Capitalised cashflow method: A shortened version of discounted cashflow where both the growth and discount rate as assumed to remain constant into perpetuity

Asset approach

This is based on the value of business being equal to the sum of all the parts of the business. Adjusting book value of each asset or liability to fair market value.

So, which do you use: it depends on the specific circumstances of the business being valued.

Do you have any questions?

We are happy to help. Please post your comment below or call Lisa Byrne, Audit Manager at Cooney Carey, on 01 677 9000. Alternatively, send her an email: lbyrne@cooneycarey.ie 

If this article helped you, please share it with others.

Posted on March 14, 2018 by Lisa Byrne

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