Process Costing and Cost Allocation

| December 19, 2015

Many accounting and accounting-related professionals are skilled in financial analysis, but most are not skilled in manufacturing. This is especially the case for process manufacturing environments (for example, a bottling plant or a chemical factory). To provide professional accounting and financial services, one must understand the industry, its product, and its processes. As accountants, we have an ethical responsibility to develop this understanding before offering services to clients in these areas. Discuss how you would obtain an understanding of key business processes of a company that hires you to provide financial services. How is this different from completing an audit?

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