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Lesson 9 Revenue

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Nguyễn Tùng
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9 views7 pages

Lesson 9 Revenue

Uploaded by

Nguyễn Tùng
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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1

Lesson 9:
Revenue
2

What you will learn?

Overview

 Related accounts

 Related supporting documents

Audit procedures

 Risk & Assertion Identification

 Audit procedures
3

Overview
1.1. Related accounts & 1.2. Related supporting documents

1.1. Related accounts

Account 511:
Turnovers from selling goods and
provisions of service
Related
accounts
Account 521:
Revenue deductions

1.2. Related supporting documents

GL of relevant accounts

Documents Trial balance


should be
obtained Sales report

Other source documents


4

Audit Procedures
2.1. RISK & ASSERTION IDENTIFICATION
Assertions Risk that may be incurred

 Fictitious or duplicate sales are recorded


Occurrence  Sales journal/AR sub ledger incorrectly posted to the
general ledger
 Sales are made to unreliable customer
 Sales recorded for wrong amount Sales journal/AR
sub ledger incorrectly posted to the general ledger
Measurement
 Invoice misstates the quantity of goods shipped
 Amounts required for financial statement disclosures
are not properly accumulated
 All customer shipments are not recorded in the
proper period
 Sales are posted to incorrect customer and revenue
Completeness
accounts
 Sales discounts are incorrectly recorded
 Sales journal/AR sub ledger incorrectly posts to GL
 Recorded sales are not evidenced by appropriate
Right &
documentation and/or were not authorized prior to
Obligation
assigning rights to trade receivables
5

Audit Procedures
2.2. AUDIT PROCEDURES

Typical Substantive Procedures and related assertions

P/L
Audit procedures
O M C P/D

Reconciliation X X

Analytical Review X X X

Cut-off test X X X

Other procedures X X X
6

Audit Procedures
2.2. AUDIT PROCEDURES

Detailed Typical Substantive Procedures

Procedure Content

 Reconcile General Ledger with Trial


Balance
 Reconcile General Ledger with monthly
Reconciliation
Revenue report from Sales and Service
Departments
 Review the policy of the firm
 Compare the following with budget, with
prior year, by month and in proportion of
the whole: Total revenue and each types of
revenue; Revenue in term of types of
Analytical product; Revenue in term of regions and
review areas; Revenue in term of customer’s
segment
 Compare the following with budget, with
prior year gross profit margin: Gross profit
margin = (Sales – COGS)/ Sales
7

Audit Procedures
2.2. AUDIT PROCEDURES

Detailed Typical Substantive Procedures

Procedure Content

 Understand nature of the business and


transaction to find the number of days to
test cut-off
Cut-off test  Chose sample on General Ledger
 Inspect source documents such as
handover minutes and invoices to verify
cut-off error

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