Investment Cycle Analysis and Financing: A Comprehensive Guide

Posted on May 17, 2024 in Law & Jurisprudence

INVESTMENT CYCLE ANALYSIS AND FINANCING

Investment

Implementation of financial resources to increase financial AF or an entity.

Funding

Sources where you can get capital to invest.

Types of Financing

  • Money for Time
  • Fixed Assets: Short-term trade credit, bank debentures.
  • Goods: Long-term mortgages, stocks, bonds, lease.

Bonus

Performance by a loan made without the company obligations.

Basics of the Investment Process

  1. Rendimiento Expected or Compensation: Profitability is expected to have for investment.
  2. Riesgo Accepted: Uncertainty about the actual performance.
  3. Temporary Period 3. Horizonte: Short, medium, or longer than the duration of the investment.
  4. Tasa Interest: This is what we pay or receive for the use of money. Calculate % x loan.
  5. Garantías: Property or assets securing the return of investment, representing the protection of the collection of a debt.
  6. Amortizacion: Gradual return of a debt in periodic payments in whole or in part.

Objectives of the Review

  • Verify that there is proper handling of values.
  • Certify the proper recording of receipts and payments.
  • To verify the application of resources in different areas of the company.
  • To verify the origin of funding sources.
  • Analyze proper application of the amounts financed in the contract terms.

Risks of the Investment Process

Investment

  • Income under budget.
  • Poor guidance in the application of resources.

Funding

  • Acquisition of resources at variable rates or high fluctuation in currency exchange rates.
  • Offer guarantees not allow us to make use of property w/ extraoordinarias emerging situations.

INTERNAL CONTROL

1. De Investment

  • If the competent official or authorized by council admon.
  • Investment budget.
  • If you have the documentation to support those commitments.
  • If properly looked after.
  • If you can identify how the resource income.
  • If there are other types of expenses they incur as a result of the opening credit.
  • If the funding is composed of a single instrument or several.

2. Del Registration

  • If you have recorded liabilities and their accessories.
  • If issued payments have grace periods.
  • What are the depreciation recorded in the corresponding period.
  • There have been the charges incurred on the opening of credit.
  • It has a control panel is due.

PROCESO COMPLETION AND AUDIT REPORT

= as reported?, reporting? =

Change Currency

  • Edo. Audited financial new date (relevant).
  • Put notes to the wine country. Financial.

No Monetary

  • To issue opinion about the contingency, causes and effects.

ØObjetivos Audit Review

  • Determine whether contingencies.
  • If you are quantifiable.
  • If they are adequately disclosed in the Edo. Financs.
  • Determine the conditions that could cause uncertainty in the continuity of the company.

PROCEDURES

1. In the Planning

  • Their legal status.
  • Operations performed.
  • The conditions of contracts.
  • Accounting practices they perform.

2. In the Analytical Review

  • Identify unusual changes.
  • Identify relevant commitments acquired.
  • Analyze the variations from one period to another (without considering the inflation, exchange rate fluctuations).
  • Copies of claims, lawsuits.
  • Confirmations bank guarantees or insurance on cast.

3. Planes Administration

  • Contributions from shareholders p/ absorb losses.
  • Loans shareholders or additional funding from credit institutions.
  • Plan of mergers with other companies.
  • Partial disposal of fixed assets.
  • Plan of reducing operating expenses.

SUBSEQUENT EVENTS AND SUBSEQUENT EVENTS

These are events that occur and/ dates from the Edo. Financs. And the date of the auditor’s opinion and are known by the auditor after the date of the opinion.

Subsequent Events

Developments since the balance sheet date until the date of the opinion that require adjustment or disclosure in the financial statements and can change user decisions.

Ø Review Objectives

  • What are reflected in the Edo. Financs.
  • And if they met after the ruling and affect edo. Financs.

Ø Review Process

  • To verify if there are events that need adjustment.
  • Review issues discussed at the council admon.
  • Review ultimos edo. Financs. Preliminaries.

REPORTS

ØDictamen of Edo. Financs.

  • Opinion cpc.
  • Reasonably well presented.
  • Qualifications, abstentions or disclaimers of opinion.
  • They can be financial or tax.
  • Edo. Liability issue. Financs. It is of the firm.

Opinion: Should State

  • Independent professional opinion s/ reasonableness of the Edo. Financs.
  • Balance gral. Edo. Result, changes in stockholders’ equity situation exchange or cash flow.
  • In accordance with generally accepted accounting principles.

NOTES TO THE FINANCIAL EDOS.

Or Format of the Basic Characteristics Opinion

1. Titulo

Opinion of the auditor or auditor’s report.

2. Destinatario

Owner, upon request (shareholders, partners, associates).

3. Identificación of Edo. Financial

Which are those that were reviewed.

A. Accountability s/ Edo. Financs.

Where:

  • Only for 1 year.
  • When replacing a cpc who ruled the previous year.
  • When edo. Financs. The previous year were not dictated.

B. Accountability s/ Edo. Financs. No Comparative Except w/ the Previous Year

  • Only by exercise.

C. Responsibility s/ Edo. Financs. Comparative

  • Both exercises.
  • Follow the proviso.

D. Description of the Scope of the Audit

  • Is conducted under rules and audit procedures generally accepted.
  • Was planned and reviewed.
  • Test is done by testing, samples.
  • The audit provides a reasonable basis.

E. Signature of Opinion

  • Name cpc p/ maintain accountability of the opinion.

F. Date of Opinion

The day we complete the review.

TYPES OF OPINION

I. Negative

When they disagree with IFRS and are important documents that you can not give an opinion.

II. Abstención Opinion

If we did but the evidence insufficient or too poor to give a reasonable opinion.

III. Con Proviso

Present the reasons for the exception quantifying its effect or expressing.

IV. Sin Proviso

V. Paragraph of Emphasis

Give an opinion on the situation of the company.

REVIEW s/ SPECIAL RULES

  • Government agencies (do not get utility).
  • Companies that are consolidated with foreign companies.

OPINION OF FINANCIAL STATEMENTS FOR TAX PURPOSES

OBJECTIVE

  • Verify compliance, tax obligations THROUGH the opinion.

Obligated

  • PF with business and am earning over 34,803,650 in the previous year.
  • Assets exceeding 69,607,920.
  • At least 300 workers.
  • Donations not deductible.
  • Merging.
  • Federal public administrative entities.
  • Companies in general, grantee, simplified scheme, banks, sofoles, financial groups, broker-dealer.

AUTHORIZED FORMAT: SIPRES

= Requirements for Ruled (CP)

  1. Mexican 1. Nacionalidad.
  2. CP 2. Titulo registered with the SEP.
  3. Counters 3. Miembro school for 3 years before his application for registration.
  4. 4. Certificación a school recognized by the SEP.
  5. 5. Experiencia least 3 years in an opinion.

= REASONS FOR CANCELLATION

  • Not dictate for tax purposes for 5 years.
  • When punished under Article 52 CFF.

-Sanctions

a) When Not Meet the Requirements of 52 CFF Does Not Comply with Auditing Standards

  • Warrant or reprimand.
  • Suspension registration for 2 years.

b) If There is Recurrence or Participated in a Tax Offense. No Paperwork Display of Authority or Requirement

  • Final Cancellation of registration.

c) If the Opinion is Issued Without Meeting the Requirements of Independence of the Accountant or the Person Which He Represents

  • Cancellation of registration.

OPINION FOR PURPOSES OF IMSS

Concept

Opinion on the reasonableness of compliance with obligations under the law of imss.

Required

  • Average of 300 workers in the immediately preceding financial year from 2003.

Objective

  • Review correctly assess the social insurance contributions in accordance with lsa generally accepted auditing standards and current tax provisions.

= INFORMATION REQUIRED

  • Present notice before the IMSS to more than 30 April.
  • Present opinion no later than 6 months after the filing of the notice (October).
  • Prepare the following information:
  • Reconciliation of total perceptions based on accounting records of wages vs. manifested before the IMSS and against the statement in isr.
  • Analysis of perceptions variables.
  • Analysis of applications increases and provisions related to wages.
  • Monthly analysis of fees paid to PF including the name, RFC and employer registration.
  • Trial Balance.
  • Liquidity resulting audit differences.

TECHNICAL REVIEW

Consider

  • To study IQ tests to select targeted.
  • The difference is covered on the test basis.
  • Identify clearly the integration of wages.
  • Review if you have notifications installments due and have not been covered.
  • Timely delivery of notices of high, low wages and changes must have the supporting documentation.
  • Backup in payroll and sua.

PATRON BENEFITS

  • Legalizing for a shorter period to exercise.
  • Not be subject to home visits by previous exercise or ruled.
  • Verification of payments not made.

PROFIT FOR THE CP

  • More work.

OPERATIONAL AUDITING

  • Review of the functions for area or department in their entire operation, deriving from her proposals for improving operational efficiency.

MAIN CILC

  • Income Cycle: Sales and/or services (revenue) collections (cash-credit).
  • Cart Cycle: Quotes shopping, mcias reception. Accounts receivable.
  • Production Cycle: Production of goods and services, inventories.

REVIEW MECHANISM

.
Initial 1.Conocimiento
2.Visita facilities
3.Análisis financial and operational (financial reasons)
4.Select of activities or transactions (relative importance)
5.Ejecución review operations .-
Documentation 6.Examen
7.Entrevista or research
8.Resumen of observations
9.Diagnostico or reports (findings, deviations and proposed)