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Accounting principles and procedures

Level 1 Competency Information

This competency covers the basic principles of accounting and the interpretation of company accounts.

Demonstrate knowledge and understanding of accounting concepts and the format and preparation of management
and company accounts, including profit and loss statements, cash flow statements and balance sheets. Provide
evidence of interpretation of company accounts and balance sheets in your area of practice and application of
appropriate accounting and regulatory standards.

Examples of likely skills, knowledge and experience:

Examples of knowledge are:
An awareness of the Generally Accepted Accounting Principles (GAAP) relevant to the candidates geographical
An awareness of International Accounting Standards (IAS)
An understanding of the financial results of a business and basic accounting principles including balance sheets,
profit and loss statements and cash flow statements
An understanding of the role of the Auditor.

Examples of tasks undertaken

Examples of activities are:
Considering financial statements to establish, for example, the financial strength of an entity
Reviewing, understanding and providing evidence of interpretation of analysts reports on financial statements
Calculating and understanding common financial measures such as return on capital employed, net assets per
share, gearing ratio etc.

Accounting principles and procedures

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