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Audit Adjustments Journals

SStayPatient8y ago
Hi Sir, I hope you can help (not an F8 question but a real life possibility) Please can you explain how post-year end audit adjustments are put through the books For example, it is picked up by the auditor that a particular asset was disposed off in accounting period ending 31 Dec 2017 but the accounting entry was not performed and hence the asset is still sitting on the books in the current period (ending 31 Dec 2018) The disposal entry will hence be posted in the current period (although it relates to previous period) but it also gives rise to a profit on disposal The auditor will make the adjustment when he prepares the financial statements for the period ending 31 Dec 2017 But what journal do we post as we are recognising a profit in the current period (prior period books are closed) Thanks for all your help
kengarrettkengarrettTutor8y ago#1
Generally, the accounting year end procedures are not done until the FS are audited and 'finished'. So just do a normal journal. In the accounting package I use, I can cchange the current date, so for the kind of adjustments you are talking about I would change the date to the previous year end, do the journal and print off the FS.
SStayPatient8y ago#2
The accounting package we use closes off the prior year and so doesn't allow us to go in and post any entries into that period I suppose then we just post the journal entries into the current period and these will be taken into account when preparing the current periods FS's so that they are not recognised twice?
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