When it comes to market failure, it is important to understand that markets are not always perfect. They can sometimes fail due to a range of different issues including externalities, monopoly power, asymmetric information, public goods, and common resources. By understanding how market failure occurs, individuals and businesses can identify …

As organizations expand their global footprint and diversify their operations, component audit assumes even greater importance. Multinational corporations with subsidiaries, joint ventures, and diverse business units must ensure their financial information accurately reflects the financial performance and position of each component. Component audits occur through a component auditor. Before discussing …

Structural unemployment is a common phenomenon in every economy. It can be seen during technological advances, changing government policies, or globalization, where the skills of employees’ skills and job requirements don’t match. It is a crucial issue for the economy, as it affects those with low education or skills who …

Companies must prepare financial statements at the end of each accounting period. The information that goes into these comes from the trial balance. Before that, however, companies adjust the trial balance to reach a post-closing version of this report. What is a Trial Balance? The trial balance is a fundamental …

Professional accountants engage in distinct types of evaluations to provide credibility and assurance to financial and non-financial information, catering to the diverse needs of stakeholders. Two of the most common ones include audits and attestation. What does Audit mean? An audit is a systematic and impartial examination of an organization’s …

Every product at some point in time sees some ups and downs due to many reasons such as economic factors, demand, supply, etc… When the product no longer remains desirable, for example, due to price hikes, people tend to switch to a substitute product with similar features. This phenomenon is …

In financial reporting, certain assets undergo a classification when a company decides to divest them. This special treatment involves changes in presentation and valuation, providing stakeholders with valuable insights into the company’s strategic plans. These resources fall under the definition of assets held for sale. What are Assets Held for …

Cash reserve is a common term used by both businesses and individuals. It refers to the money that is set aside for unforeseen expenses or emergencies. It is mostly used for short-term investments that mostly come up during business. By understanding how to properly manage cash reserves, a company can …

In recent times, auditing has experienced a profound transformation, harnessing the potential of technological advancements to enhance its methodologies and processes. Incorporating specialized computer software and innovative tools has become increasingly prevalent, enabling auditors to analyze extensive volumes of financial and operational data with unprecedented efficiency and accuracy. These fall …

Whether it’s an investment or a loan, a term sheet outlines the boundaries of an agreement between two parties. It is typically used in venture capital and private equity transactions. It’s very important to understand how term sheets work and what they can do for businesses because it will help …