The On The Revenue Business Process

2778 Words Apr 30th, 2015 12 Pages
The Revenue Business Process

By

Kanwulia Amoye

Financial Statement Auditing

Dr. Stephen Del Vecchio

April 2015

Introduction

The revenue account is a very large account in any financial statement; therefore, auditors need to design and execute a plan that would provide reasonable assurance that this account is free of material misstatement. It is also critical to understand the complex audit and accounting issues related to revenue recognition in order to carry out the audit as efficiently as possible. The auditor needs to understand the accounts involved in the business process and the support documents in order to come up with the audit objectives.
The overall objective of the audit of the revenue account is to evaluate the business process to ensure that revenue is adequately supported and authorized, transaction processing controls are adequate, segregation of duties throughout the revenue cycle is appropriate and internal controls are satisfactory. The auditor has to evaluate adherence to proper business practices; however, the primary emphasis is on reviewing internal controls for effectiveness and utilization, and examining standards and procedures for policy compliance.
This paper analyzes how the revenue business process works, the risks involved in the process, the internal controls that mitigate the risks identified and the audit procedures to be used to determine the effectiveness of these internal controls

How the Process…
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