Leader’s Primer To Finance & Accounting for Non-CPA’s

Understanding, Integrating Accounting, Controlling, and

Financial Planning and Analsis

Percentage of Completion Method• How Do Percentage-of-Completion Adjustments Bring Sanity to Your Results?• To make the POC adjustment, do the following:Compare this job’s actual cost to date (as

shown on your job cost report) against your estimated costs and compute the cost booked as a percentage of estimated cost

• .Multiply that percentage against your estimated income to match income proportionally to costs.

• Make a temporary entry to adjust your income up (or down) to keep your income aligned with costs.

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Things Leaders Need to Know

• The Accounting Equation• The Accounting Equation Basics

Accounting Cycle

Balance Sheet

Income Statement

Key Terms

Accounting Dictionary

Financial Analysis

Ratio Analysis

Breakeven Analysis

Time Line Probability AnalysisFormula for Time Line Probability Click Here

Pro Forma AnalysisPro forma analysis typically includes sections that forecast operating expenses, forecasts any changes in total assets, changes in total equities and analyzes the cost of financing versus the long-term financial reward (or loss) of the proposed change. A pro forma analysis concludes with forecast income statements and forecast balance sheets that incorporates changes in taxes and interest.

Capital Budgeting

Charge Risk Analysis

Fraud / Embezzlement DetectionThe specific steps in detection are The specific steps in detection are a matter of judgment, based on factors such as which assets are likely to be susceptible, the type of business, and the facts known about the business and its current situation. The process normally involves the following steps:a. Identify embezzlement exposures.b. Look for symptoms of embezzlement in the exposure areas.c. Consider pressures and motivations to commit embezzlement. This step might be combined with one of the other two steps.Identifying specific embezzlement exposures involves looking at factors that make certain assets more vulnerable than others. Internal control weaknesses in certain aspects of the business will become evident as an investigation or analysis progresses.As to symptoms of embezzlement, different symptoms apply to different types of embezzlement. Examples of embezzlement symptoms include:a. Analytical symptoms, such as unusual changes in gross profit percentages.b. Employee symptoms, such as unusual changes in an employee’s lifestyle or attitude.c. Tips and complaints, such as comments from employees, customers, or vendors.a matter of judgment, based on factors such as which assets are likely to be susceptible, the type of business, and the facts known about the business and its current situation. The process normally involves the following steps:a. Identify embezzlement exposures.b. Look for symptoms of embezzlement in the exposure areas.c. Consider pressures and motivations to commit embezzlement. This step might be combined with one of the other two steps.Identifying specific embezzlement exposures involves looking at factors that make certain assets more vulnerable than others. Internal control weaknesses in certain aspects of the business will become evident as an investigation or analysis progresses.As to symptoms of embezzlement, different symptoms apply to different types of embezzlement. Examples of embezzlement symptoms include:a. Analytical symptoms, such as unusual changes in gross profit percentages.b. Employee symptoms, such as unusual changes in an employee’s lifestyle or attitude.c. Tips and complaints, such as comments from employees, customers, or vendors.

In most small companies, fraud and, in particular, embezzlement can be prevented to a great extent when owners are committed to the internal control process. This includes monitoring the flow of paperwork, subtly noting the activities and attitudes of personnel, and reading and acting on financial reports. Determining if misappropriation of assets is occurring or has occurred requires writing a program of procedures, which includes reviewing the relevant internal control procedures, identifying weaknesses, listing all of the possible symptoms, noticing which symptoms exist, investigating, and evaluating the information on a step by step basis. The investigation program will change at a particular juncture when necessary, that is, when a lead is not producing results or when a new lead surfaces.