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Understanding Accounts, Balance Sheets & Audit Reports

This 3 day course is designed to equip delegates to examine, compare and assess balance sheets and accounts as well as the significance of the audit report.


The course will be highly interactive and will be driven mainly by examples

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The course is delivered in 9 sessions which are outlined below

Session 1: Introduction

  • What is a balance sheet
  • What is a profit and loss account
  • What are cash flow forecasts
  • What are auditors reports.
  • What is the purpose of financial statements
  • Accounting rules
  • Historic cost convention

Case Study/Example

Session 2: Profit & Loss Accounts

  • Key features
  • The difference between gross and net profit
  • Fixed costs versus variable costs
  • Break even analysis
  • Trends
  • Non cash items
  • Non trading items
  • Depreciation
  • Retained profits
  • Economic profit

Case Study/Example

Session 3: Assessing Balance Sheets

  • Assets Defined
  • Liabilities defined
  • Historic cost convention
  • Fixed assets
  • Current assets
  • Long term liabilities
  • Current liabilities
  • Net worth
  • The significance of the profit & loss account

Case Study/Example

Session 4: The Audit Report

  • Purpose & Function
  • What does it mean
  • Who is giving it
  • True and fair view
  • Going concern
  • Qualified report

Case Study/Example

Session 5: Cash flow forecasts

  • What are they
  • What do they show
  • How can we use them
  • Forecasting
  • Is real cash being generated
  • Economic capital and profit
  • A modern capital management framework
  • Components of capital management
  • Classes of capital ­ Tiers 1, 2 & 3
  • Composition of available (book) capital under Basel II & III
  • Regulatory vs. economic capital

Case Study/Example

Session 6: Ratios

  • Balance sheet ratios
  • Profit & Loss Ratios
  • What do they tell us
  • Which are the key ratios
  • Interest cover
  • Gearing
  • Profitability

Case Study/Example

Session 7: Audited Accounts

  • Always out of date
  • Importance of notes
  • Analysing the notes
  • Trends, forecasts and projections

Case Study/Example

Session 8: Different Businesses

  • Large corporates
  • Medium Corporates
  • SME’s
  • Partnerships
  • Professionals
  • Sole traders
  • Small businesses

Case Study/Example

Session 9: Financial Risk Analysis

  • Structure of  financial statements:
  • Assets, Liabilities
  • Income statement
  • Off balance sheet items
  • Intangibles
  • Key issues ­ liquidity, quality, margin, sustainability
  • Trend and Peer Group analysis

Case Study/Example

Session 5: Basel and Islamic Finance

Case Study: What are the key issues faced by Islamic institutions in implementing the Basel Accord?  How can these be overcome?

About Us

Learning through action - every program we deliver is highly practical and addresses real live issues.  We use simulations, exercises and case studies and all our methods are based on the latest neuroscience and positive psychology research findings.  Everything we deliver and challenge our participants to think about leads back to one simple question ­ “what am I going to do differently back at work and how?”.

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Teamworking International Limited
Nye Creek, New Road
Keyhaven, Lymington
Hampshire SO41 0TN
United Kingdom

Telephone +44 (0)1590 644 107
Or email us here

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