OHADA Accounting Systems and Internal Controls
Expert-defined terms from the Executive Certificate in OHADA Accounting course at Stanmore School of Business. Free to read, free to share, paired with a professional course.
Accountability refers to the responsibility of individuals and organizati… #
Accountability refers to the responsibility of individuals and organizations to account for their actions and decisions, ensuring that they are transparent and answerable to stakeholders, in the context of OHADA Accounting Systems and Internal Controls.
Accounting cycle is the process by which financial transactions are recor… #
Accounting cycle is the process by which financial transactions are recorded, classified, and reported, involving several steps, including identification, recording, classification, and reporting of financial information.
Accounting equation is a fundamental concept in accounting that represent… #
Accounting equation is a fundamental concept in accounting that represents the relationship between assets, liabilities, and equity, expressed as Assets = Liabilities + Equity.
Accounting period refers to the specific period of time for which financi… #
Accounting period refers to the specific period of time for which financial statements are prepared, such as a month, quarter, or year, and is used to measure and report financial performance.
Accounting policies are the principles and procedures that guide the prep… #
Accounting policies are the principles and procedures that guide the preparation of financial statements, including the recognition, measurement, and disclosure of financial transactions.
Accounting standards are the rules and guidelines that govern the prepara… #
Accounting standards are the rules and guidelines that govern the preparation of financial statements, ensuring consistency and comparability across different organizations and industries.
Accounts payable are the amounts owed by an organization to its suppliers… #
Accounts payable are the amounts owed by an organization to its suppliers and creditors for goods and services purchased on credit, and are typically reported as a current liability on the balance sheet.
Accounts receivable are the amounts owed to an organization by its custom… #
Accounts receivable are the amounts owed to an organization by its customers for goods and services sold on credit, and are typically reported as a current asset on the balance sheet.
Accrual accounting is a method of accounting that recognizes revenues and… #
Accrual accounting is a method of accounting that recognizes revenues and expenses when they are earned or incurred, regardless of when cash is received or paid.
Accumulated depreciation is the total amount of depreciation expense reco… #
Accumulated depreciation is the total amount of depreciation expense recognized over the life of an asset, and is reported as a contra-asset account on the balance sheet.
Asset turnover is a ratio that measures the efficiency of an organization… #
Asset turnover is a ratio that measures the efficiency of an organization in using its assets to generate sales, calculated as Total Sales / Total Assets.
Audit committee is a committee of the board of directors that oversees th… #
Audit committee is a committee of the board of directors that oversees the audit process, ensuring the integrity and reliability of financial statements.
Audit risk is the risk that an auditor may not detect material errors or… #
Audit risk is the risk that an auditor may not detect material errors or irregularities in financial statements, and is influenced by factors such as the complexity of transactions and the effectiveness of internal controls.
Auditing standards are the guidelines that govern the conduct of audits,… #
Auditing standards are the guidelines that govern the conduct of audits, including the planning, execution, and reporting of audit procedures.
Authorization is the process of granting permission or approval for a tra… #
Authorization is the process of granting permission or approval for a transaction or activity to occur, and is an important aspect of internal control.
Balance sheet is a financial statement that presents the financial positi… #
Balance sheet is a financial statement that presents the financial position of an organization at a specific point in time, including its assets, liabilities, and equity.
Bank reconciliation is the process of comparing and reconciling the cash… #
Bank reconciliation is the process of comparing and reconciling the cash balance reported in the financial statements with the cash balance reported by the bank, to identify and resolve any discrepancies.
Budgeting is the process of preparing and approving financial plans and f… #
Budgeting is the process of preparing and approving financial plans and forecasts, including the establishment of financial goals and objectives.
Business combination is a transaction in which two or more organizations… #
Business combination is a transaction in which two or more organizations are combined to form a new entity, and is accounted for using the acquisition method or the consolidation method.
Capital budgeting is the process of evaluating and selecting investments… #
Capital budgeting is the process of evaluating and selecting investments in long-term assets, such as property, plant, and equipment, and is based on the expected return on investment and the cost of capital.
Cash flow statement is a financial statement that presents the inflows an… #
Cash flow statement is a financial statement that presents the inflows and outflows of cash and cash equivalents over a specific period of time, and is used to evaluate an organization's ability to generate cash and meet its financial obligations.
Cash management is the process of managing an organization's cash and cas… #
Cash management is the process of managing an organization's cash and cash equivalents, including the collection, disbursement, and investment of cash.
Certified public accountant is a professional designation that requires a… #
Certified public accountant is a professional designation that requires a certain level of education, experience, and expertise in accounting and auditing.
Chart of accounts is a list of all the accounts used by an organization t… #
Chart of accounts is a list of all the accounts used by an organization to record and report financial transactions, and is organized in a logical and systematic manner.
Code of ethics is a set of principles and guidelines that govern the beha… #
Code of ethics is a set of principles and guidelines that govern the behavior and conduct of professionals, including accountants and auditors.
Compliance is the process of ensuring that an organization is in conformi… #
Compliance is the process of ensuring that an organization is in conformity with relevant laws, regulations, and standards, including those related to accounting and auditing.
Consolidation is the process of combining the financial statements of a p… #
Consolidation is the process of combining the financial statements of a parent company and its subsidiaries, to present a comprehensive picture of the group's financial position and performance.
Contingent liability is a potential liability that may arise in the futur… #
Contingent liability is a potential liability that may arise in the future, depending on the outcome of a specific event or circumstance, and is typically disclosed in the financial statements.
Control environment is the set of circumstances and attitudes that influe… #
Control environment is the set of circumstances and attitudes that influence the behavior and actions of individuals within an organization, and is an important aspect of internal control.
Cost accounting is the process of measuring and analyzing the costs of pr… #
Cost accounting is the process of measuring and analyzing the costs of producing goods and services, and is used to determine the profitability of products and services.
Cost #
benefit analysis is a method of evaluating the costs and benefits of a particular decision or action, and is used to determine whether the benefits exceed the costs.
Credit risk is the risk that a customer or borrower may not pay their deb… #
Credit risk is the risk that a customer or borrower may not pay their debts, and is an important consideration in accounting and finance.
Current asset is an asset that is expected to be converted into cash or c… #
Current asset is an asset that is expected to be converted into cash or consumed within one year or within the normal operating cycle of an organization, and is typically reported on the balance sheet.
Current liability is a liability that is expected to be settled within on… #
Current liability is a liability that is expected to be settled within one year or within the normal operating cycle of an organization, and is typically reported on the balance sheet.
Current ratio is a ratio that measures the ability of an organization to… #
Current ratio is a ratio that measures the ability of an organization to pay its short-term debts, calculated as Current Assets / Current Liabilities.
Debt #
to-equity ratio is a ratio that measures the level of indebtedness of an organization, calculated as Total Debt / Total Equity.
Depreciation is the process of allocating the cost of a tangible asset ov… #
Depreciation is the process of allocating the cost of a tangible asset over its useful life, and is typically reported as an expense on the income statement.
Disclosure is the process of providing information about an organization'… #
Disclosure is the process of providing information about an organization's financial position and performance, and is an important aspect of financial reporting.
Entity is an organization or individual that is separate and distinct fro… #
Entity is an organization or individual that is separate and distinct from its owners or stakeholders, and is the subject of financial reporting.
Equity is the residual interest in the assets of an organization, after d… #
Equity is the residual interest in the assets of an organization, after deducting its liabilities, and is typically reported on the balance sheet.
Executive committee is a committee of senior executives that oversees the… #
Executive committee is a committee of senior executives that oversees the strategic direction and operations of an organization.
External audit is an audit conducted by an independent auditor, to provid… #
External audit is an audit conducted by an independent auditor, to provide an opinion on the fairness and accuracy of an organization's financial statements.
Financial accounting is the process of preparing and reporting financial… #
Financial accounting is the process of preparing and reporting financial statements, including the balance sheet, income statement, and cash flow statement.
Financial analysis is the process of evaluating and interpreting financia… #
Financial analysis is the process of evaluating and interpreting financial data, to make informed decisions about an organization's financial position and performance.
Financial management is the process of planning, organizing, and controll… #
Financial management is the process of planning, organizing, and controlling an organization's financial resources, to achieve its objectives and goals.
Financial planning is the process of developing and implementing financia… #
Financial planning is the process of developing and implementing financial plans and forecasts, to guide an organization's financial decisions and actions.
Financial reporting is the process of providing financial information to… #
Financial reporting is the process of providing financial information to stakeholders, including investors, creditors, and regulatory bodies.
Financial statement is a document that presents the financial position an… #
Financial statement is a document that presents the financial position and performance of an organization, including the balance sheet, income statement, and cash flow statement.
Fixed asset is a long #
term asset that is not expected to be converted into cash or consumed within one year or within the normal operating cycle of an organization, and is typically reported on the balance sheet.
Foreign currency is a currency other than the functional currency of an o… #
Foreign currency is a currency other than the functional currency of an organization, and is used in international trade and investment.
Fraud is an intentional act of deceit or misrepresentation, to achieve an… #
Fraud is an intentional act of deceit or misrepresentation, to achieve an unauthorized benefit or advantage, and is a major risk in accounting and auditing.
Generally accepted accounting principles are the standards and guidelines… #
Generally accepted accounting principles are the standards and guidelines that govern the preparation of financial statements, and are widely accepted and applied.
Going concern is an assumption that an organization will continue to oper… #
Going concern is an assumption that an organization will continue to operate and generate cash flows for the foreseeable future, and is a fundamental principle of financial reporting.
Goodwill is an intangible asset that represents the excess of the purchas… #
Goodwill is an intangible asset that represents the excess of the purchase price of an acquisition over the fair value of its net assets, and is typically reported on the balance sheet.
Gross margin is a ratio that measures the profitability of an organizatio… #
Gross margin is a ratio that measures the profitability of an organization, calculated as Gross Profit / Sales.
Hedging is a technique used to manage and mitigate financial risks, such… #
Hedging is a technique used to manage and mitigate financial risks, such as interest rate risk or foreign exchange risk.
Internal audit is an audit conducted by an organization's internal audit… #
Internal audit is an audit conducted by an organization's internal audit function, to evaluate and improve the effectiveness of internal controls and risk management.
Internal control is a process designed to provide reasonable assurance re… #
Internal control is a process designed to provide reasonable assurance regarding the achievement of an organization's objectives, including the reliability of financial reporting and compliance with laws and regulations.
Internal control framework is a structure that outlines the policies, pro… #
Internal control framework is a structure that outlines the policies, procedures, and guidelines for internal control, and is used to guide the design and implementation of internal controls.
Inventory is a current asset that represents the goods or materials held… #
Inventory is a current asset that represents the goods or materials held for sale or in production, and is typically reported on the balance sheet.
Inventory management is the process of managing and controlling inventory… #
Inventory management is the process of managing and controlling inventory levels, to minimize costs and maximize efficiency.
Investment is an asset that is acquired or held for the purpose of genera… #
Investment is an asset that is acquired or held for the purpose of generating returns, such as dividends or interest, and is typically reported on the balance sheet.
Investment appraisal is the process of evaluating and selecting investmen… #
Investment appraisal is the process of evaluating and selecting investment opportunities, based on their expected returns and risks.
Lease is a contract that grants the use of an asset for a specified perio… #
Lease is a contract that grants the use of an asset for a specified period of time, in exchange for a series of payments, and is typically reported on the balance sheet.
Liability is a present obligation that is expected to be settled in the f… #
Liability is a present obligation that is expected to be settled in the future, and is typically reported on the balance sheet.
Liquidity is the ability of an organization to meet its short #
term debts and obligations, and is typically measured using liquidity ratios such as the current ratio.
Management accounting is the process of preparing and reporting financial… #
Management accounting is the process of preparing and reporting financial and non-financial information, to guide an organization's management decisions and actions.
Materiality is a concept that refers to the significance or importance of… #
Materiality is a concept that refers to the significance or importance of a transaction or event, and is used to determine whether it should be reported or disclosed in the financial statements.
Net income is the profit earned by an organization, calculated as Revenue #
Expenses, and is typically reported on the income statement.
Net present value is a method of evaluating investment opportunities, by… #
Net present value is a method of evaluating investment opportunities, by discounting the expected cash flows to their present value.
Operating cycle is the period of time between the acquisition of goods or… #
Operating cycle is the period of time between the acquisition of goods or services and the realization of cash from their sale, and is used to determine the classification of assets and liabilities.
Operating lease is a lease that is not capitalized, and is typically repo… #
Operating lease is a lease that is not capitalized, and is typically reported as an expense on the income statement.
Operational risk is the risk of loss or damage resulting from inadequate… #
Operational risk is the risk of loss or damage resulting from inadequate or failed internal processes, systems, and people, and is an important consideration in risk management.
Organization is an entity that is separate and distinct from its owners o… #
Organization is an entity that is separate and distinct from its owners or stakeholders, and is the subject of financial reporting.
Payroll is the process of managing and accounting for employee compensati… #
Payroll is the process of managing and accounting for employee compensation and benefits, and is typically reported as an expense on the income statement.
Pension is a post #
employment benefit that is provided to employees, and is typically reported as a liability on the balance sheet.
Performance measurement is the process of evaluating and measuring an org… #
Performance measurement is the process of evaluating and measuring an organization's performance, using financial and non-financial metrics.
Petty cash is a fund that is used to pay for small expenses, such as offi… #
Petty cash is a fund that is used to pay for small expenses, such as office supplies or travel expenses, and is typically reported as a current asset on the balance sheet.
Profit and loss account is an account that presents the revenues and expe… #
Profit and loss account is an account that presents the revenues and expenses of an organization, and is used to calculate the net income or loss.
Property, plant, and equipment are tangible assets that are used in the p… #
Property, plant, and equipment are tangible assets that are used in the production of goods or services, and are typically reported on the balance sheet.
Prudence is a concept that refers to the exercise of caution and judgment… #
Prudence is a concept that refers to the exercise of caution and judgment in financial reporting, to ensure that assets and revenues are not overstated, and liabilities and expenses are not understated.
Public sector is the sector of the economy that is owned and controlled b… #
Public sector is the sector of the economy that is owned and controlled by the government, and is typically subject to unique accounting and reporting requirements.
Quality control is the process of ensuring that financial information is… #
Quality control is the process of ensuring that financial information is accurate, complete, and reliable, and is an important aspect of auditing and financial reporting.
Ratio analysis is the process of using financial ratios to evaluate and i… #
Ratio analysis is the process of using financial ratios to evaluate and interpret financial data, and is used to make informed decisions about an organization's financial position and performance.
Receivable is an amount that is owed to an organization by its customers… #
Receivable is an amount that is owed to an organization by its customers or debtors, and is typically reported as a current asset on the balance sheet.
Recognition is the process of recording a transaction or event in the fin… #
Recognition is the process of recording a transaction or event in the financial statements, and is based on the accounting standards and principles.
Reconciliation is the process of comparing and reconciling two or more se… #
Reconciliation is the process of comparing and reconciling two or more sets of data, to identify and resolve any discrepancies or differences.
Regulatory risk is the risk of non #
compliance with laws, regulations, and standards, and is an important consideration in risk management.
Reliability is a concept that refers to the accuracy, completeness, and c… #
Reliability is a concept that refers to the accuracy, completeness, and consistency of financial information, and is an important aspect of financial reporting.
Return on investment is a ratio that measures the return on an investment… #
Return on investment is a ratio that measures the return on an investment, calculated as Net Income / Total Investment.
Revenue recognition is the process of recording revenue in the financial… #
Revenue recognition is the process of recording revenue in the financial statements, and is based on the accounting standards and principles.
Risk assessment is the process of identifying, evaluating, and prioritizi… #
Risk assessment is the process of identifying, evaluating, and prioritizing risks, to determine their likelihood and potential impact.
Risk management is the process of identifying, assessing, and mitigating… #
Risk management is the process of identifying, assessing, and mitigating risks, to minimize their potential impact on an organization.
Segment reporting is the process of reporting financial information by se… #
Segment reporting is the process of reporting financial information by segment, such as by product, geography, or customer, and is used to provide more detailed and relevant information to stakeholders.
Separation of duties is a control that is designed to prevent a single in… #
Separation of duties is a control that is designed to prevent a single individual from having too much authority or control, and is an important aspect of internal control.
Social responsibility is the concept that refers to an organization's obl… #
Social responsibility is the concept that refers to an organization's obligation to act in a responsible and ethical manner, towards its stakeholders and the environment.
Stakeholder is an individual or group that has an interest or stake in an… #
Stakeholder is an individual or group that has an interest or stake in an organization, such as shareholders, employees, customers, or suppliers.
Standard costing is a method of costing that uses predetermined costs, to… #
Standard costing is a method of costing that uses predetermined costs, to estimate the cost of goods or services.
Statement of changes in equity is a financial statement that presents the… #
Statement of changes in equity is a financial statement that presents the changes in an organization's equity over a specific period of time.
Statement of financial position is a financial statement that presents th… #
Statement of financial position is a financial statement that presents the financial position of an organization at a specific point in time, including its assets, liabilities, and equity.
Subsidiary is a company that is controlled by another company, known as t… #
Subsidiary is a company that is controlled by another company, known as the parent company.
Taxation is the process of levying and collecting taxes, and is an import… #
Taxation is the process of levying and collecting taxes, and is an important aspect of financial management and planning.
Time value of money is a concept that refers to the idea that a dollar to… #
Time value of money is a concept that refers to the idea that a dollar today is worth more than a dollar in the future, due to the potential for earning interest or returns.
Transaction is an event or activity that is recorded in the financial sta… #
Transaction is an event or activity that is recorded in the financial statements, such as a sale, purchase, or payment.
Treasury management is the process of managing an organization's cash and… #
Treasury management is the process of managing an organization's cash and liquidity, to minimize costs and maximize returns.
Trial balance is a list of all the accounts in the general ledger, with t… #
Trial balance is a list of all the accounts in the general ledger, with their respective debit or credit balances, and is used to prepare the financial statements.
True and fair view is a concept that refers to the presentation of financ… #
True and fair view is a concept that refers to the presentation of financial information in a way that is accurate, complete, and unbiased, and is an important aspect of financial reporting.
Uncertainty is a concept that refers to the lack of clarity or precision… #
Uncertainty is a concept that refers to the lack of clarity or precision in financial information, and is an important consideration in financial reporting and decision-making.
Value chain is a series of activities that create value for an organizati… #
Value chain is a series of activities that create value for an organization, from the production of goods or services to their delivery to customers.
Variance analysis is the process of analyzing and explaining the differen… #
Variance analysis is the process of analyzing and explaining the differences between actual and budgeted or forecasted amounts, and is used to identify areas for improvement.
Working capital is the amount of capital that is required to fund an orga… #
Working capital is the amount of capital that is required to fund an organization's day-to-day operations, and is typically reported as a current asset on the balance sheet.
Write #
off is the process of removing an asset or expense from the financial statements, due to its impairment or irrecoverability.
Year #
end is the date that marks the end of an organization's financial year, and is used to prepare the financial statements.