INTRODUCTION TO SPECIALIZED INDUSTRIES AND AUDIT
CONSIDERATIONS
WHAT ARE SPECIALIZED INDUSTRIES?
These are industries which are likely either to have specific financial reporting standards
applicable to them, or to have distinct accounting policies which have been developed
to account for specialized transactions and balances which are based on the normallyapplied financial reporting standards.
A specialized industry is a distinct market that has a unique way of accounting for
transactions and reporting its financial results. These differences are allowed under
the applicable accounting framework, such as IFRS or GAAP.
Examples:
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Airline
Banking and Insurance
Agriculture
Oil Extraction
Cooperatives
Homeowners Associations
Golf Courses
Real Estate
Food Processors
Public and Private Schools
Hotels
What makes these industries specialized?
1. They are LIKELY to have specific financial reporting standards
2. They MAY have different accounting policies
3. They HAVE specialized transactions
AUDIT CONSIDERATIONS
Specialized industries are not necessarily rare or unusual. Therefore, the audit of these
industries is not entirely different from the audit of other industries.
Choose 1 specialized industry and give reasons why they are considered specialized. No
need to submit answers but be ready to recite next meeting (March 4, 2023).