COVER STORY

Lean Accounting :Principles, Practices and Tools -- S Vijayalakshmi

Lean manufacturing and traditional accounting systems disagree with each other in so many ways leading to considerable difficulties. The basic problem lies with the history of accounting. Activity-based costing system attempts to identify the basic factors that drive the overhead costs. It allocates overhead costs that reflect the cost drivers. The main emphasis of lean accounting is on eliminating waste rather than reduction of costs.

© 2008 The Icfai University Press. All Rights Reserved

COSTING

Life Cycle Costing -- Vikas Shrotriya

Life Cycle Costing (LCC) technique is used to determine the total cost of manufacturing a product with an objective of assisting in pricing decisions. It is based on product life cycle concept. It covers the entire life of the product, i.e., from the inception of the idea to the product distribution and sales and progress through different phases of its life cycle. Life cycle costing technique is also applicable to costing of assets. This method makes costs noticeable in relation to various stages of the product life and thus it is easier to analyze whether the cost incurred at a specific life stage is justified or not. Life cycle costing also helps in planning various expenditures in juxtaposition to product or asset life stage. This article discusses some aspects of LCC.

© 2008 The Icfai University Press. All Rights Reserved

MERGERS AND ACQUISITIONS

A Step Towards Convergence in M&A Accounting -- Cheryl de Mesa Graziano and Ellen M Heffes

Many in the US didn't have a problem with them, yet the business combination standards have been modifiedan early sign of the strengthening trend towards developing a high-quality global set of accounting standards. Financial Executives and Financial Executives Research Foundation asked preparers and standard-setters to weigh in.

© 2008 Financial Executive. This article was originally published in www.financialexective.org on April, 2008. Reprinted with permission.

FINANCIAL REPORTING

Evaluating SAP Controls for Sarbanes-Oxley Compliance -- Jamison Tomasek and Christo Ovcharov

Internal auditors can play a vital role helping small and mid-sized organizations achieve Sarbanes-Oxley compliance by optimizing the audit of IT general controls in SAP processes.

© 2008 Jamison Tomasek & Christo Ovcharov. The Institute of Internal Auditors. Originally published in www.theiia.org. Reprinted with permission.

ACCOUNTING STANDARDS

Global Accounting Standard Norms : A Benchmark in the World of Accounting -- BK Mohanty

In India, the corporate culture and compliance level often do not inspire adequate confidence and comfort to shareholders, creditors, capital market and revenue authorities. They do not get the correct information about the actual financial status and solvency. Companies are required to provide the audited financial statements which give the true and fair view of their state of affairs and profitability to their shareholders. These statements are based on the facts and accounting standards of ICAI. The major problem in India is the multiplicity of regulatory agencies and insufficiency of their powers. What is needed now is the unification of corporate laws.

© 2008 The Icfai University Press. All Rights Reserved

AUDITING

Auditor Resignations and Dismissals : Their Effect on the Profession -- Lisa A Owens-Jackson, Diana R Robinson and Sandra Waller Shelton

Over the last eight years the number of auditor resignations has grown significantly because of conflicts of interests and increased number of poor audit quality law suits against Certified Public Accountant (CPA) firms. As the national economy slows, more businesses are likely to fail. In the past, the number and size of lawsuit settlements had gone up as the economy had declined.

© 2008 The CPA Journal. This article was published in the January issue of The CPA Journal with permission from the New York State of Certified Public Accountants. Reprinted with permission.

AUDITING

Rotation of Controls -- Guylaine Duval

Implementation of new standards leaves room for interpretation, which for auditors means more detailed documentation. The new standards specify what is expected from auditors regarding their understanding of internal control potentials that go beyond what many practitioners have incorporated in their files.

© 2008 CA Magazine, Published by the Canadian Institute of Chartered Accountants, Toronto. Reprinted with permission.

SPPSECH

A Focus on Financial Reporting Address by the Director, Division of Corporation Finance, US Securities and Exchange Commission -- John W White

The speech focused on financial reporting and steps to improve an effective and efficient basis. The main focus was on comparability, accessibility and reliability of financial information which is a hallmark of current corporate finance. Good financial reporting is mandatory for corporates. The information in financial statements is used for comparing the operating efficiency of the company. So steps should be taken to improve the quality of reporting on an effective basis. XBRL (Extensive Business Reporting Language) is the software language for business financial reporting.

© 2008 US Securities & Exchange Commission (www.Sec.gov). Speech by John W White, Director, Conference co-sponsored by the Securities Regulation Institute in California. January 23, 2008. Reprinted with permission.