current assets

Economic terminology

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flow assets (Current Assets) refer to the assets that can be realized or used by an enterprise within an operating cycle of one year or more Enterprise assets An integral part of. In the transition of turnover, current assets start from the monetary form, change its form in turn, and finally return to the monetary form（ Monetary capital → Reserve funds 、 Fixed capital → Production funds → finished product funds → monetary funds), various forms of funds are closely combined with production and circulation, and the turnover speed is fast, Liquidity Strong. Strengthening the audit of current assets business is conducive to determining the legitimacy and compliance of current assets business, checking the correctness of accounting treatment of current assets business, exposing its existing drawbacks, and improving the use efficiency of current assets.

Chinese name: current assets
Foreign name: Current Assets

Subordination: Enterprise assets
Category: 3 kinds

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Asset content

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Current assets include monetary capital Short term investment 、 Notes receivable 、 Accounts receivable and stock Etc. As the characteristics of each project are different, they should be reviewed separately according to their different requirements.

1. In physical form, current assets are basically reflected in the material reserves of various departments and residential areas. include:

(1) The current assets in the state of preparation for production and consumption refer to the means of production reserved by production units and consumer goods reserved by consumption departments and residents;

(2) Current assets held for sale. Production department and circulation department stock Unsold reserves of means of production and consumer goods and reserve materials stored by the state;

(3) Current assets in the process of production. It refers to the WIP 、 Partially Prepared Products Reserves.

2. It can be divided into quick assets and Non quick assets 。 include:

(1) Quick assets refer to current assets that can be realized in a short time, such as monetary funds Trading financial assets And various receivables.

(2) Non quick assets include inventory Deferred expenses , Pre payment . Due within one year Non current assets as well as Other current assets 。

Turnover mode

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Current assets greater than current liabilities , which generally indicates a strong short-term ability to repay, Current ratio The higher the liquidity of the enterprise's assets, the greater the liquidity of the enterprise's assets, indicating that the enterprise has enough assets to realize for debt repayment. However, the higher the current ratio, the better.

Because the ratio is too large, indicating that current assets are occupied more, which will affect Operating funds Turnaround efficiency and Profitability ； If the ratio is too low Solvency Poor. Therefore, it is generally believed that the reasonable minimum current ratio is 2. This is because among current assets, the inventory with the worst liquidity accounts for about Total assets The remaining liquid assets with high liquidity should be at least equal to current liabilities, so that the solvency of the enterprise can be guaranteed.

Turnover rate of current assets It refers to the turnover times of the average amount of current assets used to complete product sales in a certain period. It is Main business income The ratio of net amount to the average balance of all current assets reflects the turnover speed of current assets and the utilization effect of current assets. The fast turnover speed will relatively save current assets, which is equal to relatively expanding asset investment and enhancing the profitability of enterprises; To slow down the turnover speed, it is necessary to supplement current assets to participate in the turnover, resulting in capital waste and reducing the profitability of the enterprise.

Turnover rate of current assets= Net income from main business ÷ Average occupancy of current assets

Main characteristics: 1. The occupation form of current assets is changeable; 2. The number of current assets occupied is volatile; 3. The current asset cycle is consistent with the production and operation cycle.

Relevant characteristics

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1. The occupation form of current assets is variable;

2. The number of current assets occupied is volatile;

3. Circulation and production of current assets Business cycle Have consistency;

4. The sources of current assets are flexible and diversified.

Partial classification

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From different angles, there can be different ways of classification. Moreover, different industries also have different composition of current assets.

（1） According to the role of current assets in enterprise production and operation

1、 industrial enterprise The current assets of can be divided into:

（1） Reserve assets : Current assets in production preparation stage from purchase to production, including raw materials and main materials, auxiliary materials, fuels, spare parts for repair, low value consumables Packaging , purchased semi-finished products, etc;

（2） productive assets : From investment to Finished products Current assets in the process of production up to the date of receipt, including WIP , self-made semi-finished products, prepaid expenses, etc;

(3) Finished Product Assets: current assets in the process of product waiting for sale from product warehousing to product sales, including finished products and semi-finished products and parts ready for sale;

(4) Settlement assets: all kinds of issued goods Accounts receivable , notes receivable, etc;

(5) Monetary assets: bank deposit 、 Cash on hand Etc.

2、 Commercial enterprises The current assets of can be divided into:

(1) Commodity assets: including Goods in stock And goods in transit;

（2） Non commodity assets : including packaging Materials and supplies 、 Low value consumables . Prepaid expenses;

(3) Settlement assets: including various receivables, prepayments Notes receivable Etc;

(4) Monetary assets: including bank deposits, cash on hand, etc.

The proportion of the same kind of current assets in industrial enterprises and commercial enterprises is very different, and the proportion of commercial enterprises is much higher than that of industrial enterprises.

（2） According to the manifestation of current assets

Can be divided into Monetary current assets And current assets in physical form. Monetary current assets exist in monetary form, including the above settlement assets and monetary assets; Current assets in physical form include the above reserve assets, production assets Finished assets It is the key point of current asset price assurance.

（3） According to current assets Plan management Needs of

Can be divided into Fixed current assets and Non fixed current assets 。 Fixed current assets are the basic components of current assets, including raw materials, auxiliary materials, products in process Self made semi-finished products , finished products, etc; Non fixed current assets include settlement assets and monetary funds.

Pricing method

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taxpayer Commodities, materials, finished products Partially Prepared Products And other inventories shall be calculated based on actual cost Shall prevail. Occurrence and requisition of various inventories of taxpayers Cost price The calculation method of can be found in FIFO 、 LIFO 、 Weighted average method 、 Moving average method And other methods. Once the pricing method is selected, it shall not be changed at will. If it is really necessary to change the pricing method, the next Tax year It shall be reported to the competent tax authority for filing before the commencement. (From《 Detailed Rules for the Implementation of the Interim Regulations of the People's Republic of China on Enterprise Income Tax 》）

《 Measures for Pre tax Deduction of Enterprise Income Tax 》(Guo Shui Fa [2000] No. 84) Indirect costs Allocation method Inventory valuation method Once confirmed, it shall not be changed at will. If it is really necessary to change it, it shall be reported to the competent tax authority for approval before the beginning of the next tax year. The approval of this project will be cancelled from July 1, 2004.

Management significance

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1. It is conducive to ensuring the smooth production and operation of enterprises;

2. It is conducive to improving the enterprise working capital Utilization effect of;

3. It is conducive to maintaining the enterprise asset structure To improve solvency and maintain corporate reputation.

Management requirements

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1. The combination of liquidity and profitability of assets;

2、 asset management Combine with fund management;

3. Combination of fund use and material movement.

Audit role

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primary coverage

There are many items of current assets, but from the perspective of audit, they can be divided into two categories: Physical assets , such as monetary capital, inventory, etc., one kind of assets in non physical form, such as Short term investment And various Creditor's rights Etc.

1. Monetary capital, short-term investment Receivables and prepayments . Whether the inventory really exists, the account is consistent with the reality, and is actually owned by the enterprise;

2. Whether all revenue and expenditure or increase and decrease businesses are legal and the records are complete;

3. Whether the inventory valuation is correct, whether the valuation method is consistent before and after use, and if there is any change, whether the change is legal and reasonable;

4. Whether the current asset items are properly reflected in the accounting statements.

Main significance

Current assets audit stay Financial audit It plays a very important role in the audit of current assets internal control system To evaluate the soundness and effectiveness of, and to verify the authenticity and correctness of the balance amount of current assets, which is conducive to ensuring its Accounting statements The appropriateness of reflection is conducive to protecting the safety and integrity of current assets, revealing illegal and criminal acts, promoting the full and effective use of current assets, and constantly improving the economic benefits of enterprises.

Audit procedures

The audit of current assets generally follows the following procedures:

1. Review the soundness and effectiveness of the internal control system of current assets, analyze and judge the credibility of the enterprise's internal control system of current assets, so as to determine the scope, focus, procedures and methods of further audit;

2. Verification of current assets Book balance To reveal the fact that the enterprise has underestimated, concealed or falsely recorded current assets, and ensure that Accounting information Credibility;

3. Review the authenticity, legality and correctness of the increase and decrease of current assets, reveal the problems existing in the increase and decrease of current assets, and ensure the normal operation of current assets;

4. Review the safety and integrity of current assets management, reveal the problems existing in the custody of current assets, and ensure the safety, integrity and full use of current assets;

5. Review the appropriateness of current assets reflected in the accounting statements to facilitate the application of statement users accounting information And make correct judgments and decisions.

Assessment

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Due to the complex form of current assets and the heavy workload of assessment, inventory and verification, many projects often adopt the practice of audit before assessment. It is precisely because of the diversity of the forms of current assets, the different methods of inventory and verification and the problems to be considered when determining the appraisal value, so the quality control of current assets also shows diversity. The following aspects can be used to realize the quality control 。

Control quality by formulating strict work procedures

First of all, making a scientific operation plan is the premise of quality control. The project leader is in assessment At the beginning of the work, the characteristics and distribution of the current assets within the appraisal scope, as well as the industry finance accounting system And then design a comprehensive and feasible operation scheme according to the characteristics of the project. The operation plan has various forms, but its contents should at least include the background of the project, the organization and working schedule of the appraisers, the introduction of the asset status and the guidance of the appraisal method, the specific requirements of the appraisal report Working paper Specific requirements, etc.

Secondly, evaluation training is the key to quality control. The operation plan is a quality objective formulated by the project leader, which needs to be implemented in the evaluation work. The implementation of the plan must first enable the implementers and participants of the plan to accurately understand the specific requirements of the plan, that is, to conduct evaluation training. The evaluation training mentioned here includes two aspects, one is the training of evaluation personnel, the other is the training of relevant personnel arranged by the evaluated enterprise to cooperate with the evaluation. Through the training, the relevant personnel of the enterprise can fully understand the requirements of the evaluation work, clarify their responsibilities in the evaluation process, and contribute to the smooth implementation of the evaluation work.

Thirdly, on-site tracking and monitoring is an effective guarantee for quality control. Tracking and monitoring can be carried out on site Spot check , telephone inquiry or regular report by staff. The investigation object can be an evaluator or a customer.

According to the characteristics of current assets, the key point of on-site monitoring is whether the inventory counting range meets the requirements of asset evaluation operation specifications, and whether the inventory counting form is completed as required; bank deposit Whether the bank statement has been checked Large deposit Whether to query the bank; For key accounts receivable Other receivables Whether the confirmation letter has been sent for current accounts, and how about the reply; Whether the cash has been checked, and whether there are any violations of financial regulations such as notes; Whether the major contracts and vouchers have been spot checked and verified.

Finally, audit and acceptance is the core of quality control. specific Evaluation of current assets Review procedure of: At the beginning of the project Internal audit The committee shall register for the record and determine the competent leader to be responsible for the whole project Leadership 。 After the current assets appraisers have completed the specified appraisal work according to the requirements of the operation plan, the team leader of the current assets specialty shall first conduct a preliminary review of the team members' work results, and then submit the appraisal description, appraisal list and Working paper Submit to the project leader. After reviewing its completeness and accuracy and implementing the modification opinions, the project leader shall assessment report The book shall be submitted to the manager of the business department for review. The manager of the Business Department shall report to Internal audit Third instance of the committee. When the final report is issued, it must be signed by the auditors at all levels and the leader in charge. At the same time, Legal representative The final check procedure will also be implemented.

Use working papers to control quality

It is a requirement to prevent assessment risks to strictly follow the requirements of asset assessment operation specifications and implement the assessment procedures for current assets. By designing a set of scientific and reasonable current assets Working paper It is an effective way to check whether the evaluators have implemented the necessary evaluation procedures.

Although the evaluation of current assets is a single asset evaluation, it is inextricably linked with the production and operation status and management system of the evaluated enterprise. For example, the market sales status of products will affect the profit level of finished products. By understanding the marketability of the products of the evaluated enterprise in the market, it can be determined that Net profit Deduction range to determine the evaluation value. Financial accounting system etc. Financial accounting system The relevant provisions of are closely related to the evaluation of current assets. Therefore, the working paper of current assets should be designed with investigation records of the production and operation status and management system of the evaluated enterprise.

The key point of inventory and cash check is to count, through which the quantity of various denomination currencies is confirmed, and the quantity and quality of inventory are confirmed, laying a good foundation for calculating the evaluation value. Therefore, the current assets Working paper There must be no shortage of inventory and cash count sheets in the. For some special projects that need to be tested by specific test methods and technical appraisal by special appraisers, the appraisers must also obtain the test results issued by the special quality inspection department. In stock Inventory During the process, evaluators should also pay attention to bill Or the voucher shall be verified property right 。

For current assets such as bank deposits and creditor's rights, such as accounts receivable and other receivables, the appraisers can check whether they implement the necessary letter procedures by compiling working papers such as confirmation inquiry and reply statistics. Confirmation letter The appraisers must count the effective number of confirmation letters and the authenticity and accuracy of relevant accounts according to the reply, and determine whether it is necessary to expand Correspondence Range.

Make full use of various financial analysis means to control quality. And most of them have clear market transaction prices fixed assets Different, the appraisal of current assets often requires appraisers to make full use of historical data or external statistical data for analysis and judgment to determine a more reasonable appraisal value.

For example, in the evaluation of receivables, the appraisers can get a preliminary conclusion on whether the receivables really exist according to the correspondence with the debtor. However, it is still impossible to judge whether the money can be recovered based on the book value that is consistent with the check. In this way, the appraisers can Aging Carry out analysis and make comprehensive judgment based on the reputation and repayment ability of the debtor in the special case Receivables And reasonably determine the assessment value according to the size of the risk.

Another example is the evaluation of inventory. The appraisers judge the difference between book value and present value Can be combined Inventory turnover To proceed. If the turnover rate of a certain type of inventory is very fast, and the market price changes little in the corresponding period, the appraisers shall Importance principle Then we can consider whether the appraisal value can be recognized according to the book value. Conversely, if the appraiser adopts the method of confirming the appraisal value by book value, the reviewer can also judge whether the selected method is reasonable by checking the turnover speed of the inventory.

Account difference

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Current assets and working capital

Working capital is the capital occupied by enterprises in the process of production and operation on current assets. It has the characteristics of short turnover period and changeable form. It is the enterprise property that can be taken out at any time and can be turned over in a short time. Monetary capital includes cash, bank deposits Other monetary funds ； Current assets include: monetary capital, short-term investment, notes receivable Dividends receivable , interest receivable, accounts receivable, other receivables Prepayments 、 Subsidies receivable , inventory, prepaid expenses, due within one year Long-term debt investments Other current assets.

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