INSPECT / INSPECTION Definition

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INSPECT / INSPECTION, during an audit, is to scrutinize or critically examine a document. As part of a CPA firm's quality control system, a procedure to monitor the effectiveness of the system.

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ACCRUED INVENTORY functions as a "clearing" account to establish a liability for inventory physically received into the warehouse, but for which a vendor invoice had not yet arrived.

EXCESS OF REVENUE OVER EXPENSES in the not-for-profit sector. There is a common misconception that not-for-profit organizations are not allowed to have a financial cushion as they are 'not-for-profit'. In this context it is useful to remember that not-for-profit organizations are also 'not-for-loss' organizations. An organization cannot sustain losses over the long term without ceasing to operate or going bankrupt. Excess of revenue over expenses is the planned financial position that there will always be a sufficient amount of funds on hand to continue to run the not-for-profit entity for some period without additional funding; usually 3-4 months.

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