At which points in the revenue cycle are independent verification controls necessary?

Q: Describe how revenue recognition relates to transferring goods or services.

A: Revenue:   It refers to the earnings of an enterprise from their normal business operations for a…

Q: The audit of revenue recognition generally involves significant audit risk for all of the following…

A: Answer: Concept: Audit is an independent investigation performed to identify any loopholes in…

Q: What are agency problems?

A: Owners of the company are shareholders. The number of the shareholders for a corporation will be…

Q: Explain how materiality affectsaudit reporting decisions.

A: American Institute of Certified Public Accountants (AICPA): AICPA is the organization which supports…

Q: Distinguish among tests of details of balances, tests of controls,and substantive tests of…

A: Substantive Testing: It is an audit procedure that helps examine the supporting documents and…

Q: What does an audit procedures should be applied to Required Supplementary Information?

A: Definition:   Audit report: An audit report refers to the written report issued by an auditor to…

Q: What qualitative and quantitative disclosures arerequired related to revenue recognition?

A: Revenue recognition is a generally accepted accounting principle (GAAP) that identifies the specific…

Q: Explain the current environment regarding revenue recognition.

A:

Q: How to determine the timing and measurement of revenue.

A: Revenue recognition principle is the principle that determines when and how much amount should be…

Q: Determine the timing of revenue recognition with respect to licenses, franchises, and other common…

A: Revenue is recognised at the point of time when delivery of goods are made.

Q: How must an auditor document understanding of Internal Control?

A: Definition:   Internal control: Internal control is a process which ensures continuous reliability…

Q: Discuss the possibility of substantial misstatement throughout the revenue and collection cycle,…

A: This question explains about  the revenue and collection cycle, with an emphasis on erroneous…

Q: Revenue Realization and Matching principles

A: Option 1 is wrong because the statement is true. Revenue should be recognized when the process of…

Q: what are the concepts of revenue recognition?

A: Definition:   Revenue recognition principle: Revenue recognition principle states that every…

Q: Discuss the fundamental concepts related to revenue recognition and measurement.

A: Revenue Recognition: Revenue recognition is a Generally accepted accounting principle that tells…

Q: When does an agency problem happen?

A: Agency problem is the probelm of difference in opinion of management and the shareholders.

Q: Define the term revenue recognition.

A: Accounting principle: These are the guidelines which are to be applied while preparing the…

Q: How is a revenue-recognition abuse related to the percentage of completion method?

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: When is revenue recognized with respect to licenses?

A: In case of Licences, revenue is recognised in two ways depending on the type of transaction. If the…

Q: What are disadvantages of internal public audit?

A: Internal public audit refers to evaluation of a company's internal controls and accounting process…

Q: How should an auditor test for proper authorization in the expenditure cycle?

A:

Q: What are the similarities between internal and external audit

A: Audit is an official financial inspection of an organization's account, usually by an independent…

Q: Discuss the importance of accounting for multiple performance obligations in a revenue arrangement…

A: Here discuss about the importance of the performance obligation which are identified in the contract…

Q: Why is inherent risk for the existence of inventory an issue in the expenditure cycle audit?

A:

Q: What is the difference between audit and accounting

A: Audit and accounting are two important things in business. Two of them are equally important for…

Q: When should DJD recognize revenue

A: The revenues in these type of contracts are based on two types of contracts. 1. Revenues under…

Q: With regard to segregation of duties, rule one is that transaction authorization and transaction…

A: Answer: One of most important part of internal control is segregation of duties. It includes that…

Q: Explain how the purposes and principles of internal controls are different between accounting…

A: GAAP-Generally Accepted Accounting Principles:   They are commonly known as GAAP. It is a…

Q: Which method(s) are required for external reporting? For internal reporting?

A:

Q: Discuss the risk of material misstatement in the revenue and collection cycle, with a specific focus…

A:

Q: What are the primary control procedures to ensure completeness of recorded revenues?

A:

Q: What function does the receiving department serve in the revenue cycle?

A:

Q: What is Physical Systems of Revenue Cycle?

A: Revenue cycle           Revenue cycle are divided into two              a. physical phase…

Q: What are the most common revenue-recognition abuses identified by auditors?

A:

Q: How is independent verification carried out in a manual revenue system, and give an example?

A: Verification is a process under which the confirmation is made by the auditor related to the actual…

Q: List the revenue cycle audit objectives derived from the “existence or occurrence” management…

A: Assertion: management asserts that the information provided by them is complete , exist , correctly…

Q: Explain the primary functions of internal controls procedures in the accounting area. What is meant…

A: Internal control: The internal control refers to the plan of a company. Implementation of effective…

Q: When must multiple performance obligations in a revenuearrangement be accounted for separately?

A: Performance Obligation:  Performance obligation means a promise to transfer goods or services. A…

Q: Give examples of tests of controls to test theoperating effectiveness of internal controlsin the…

A: Test of Controls: The test of controls includes the procedures that are developed to generate…

Q: Identify important internal control activitiespresent in a properly designed system tomitigate the…

A: Internal control activities to mitigate risk in revenue and collection cycle: 1. Monthly…

Q: What is dual-direction test of controls sampling in the revenue and collection cycle?

A: Given: To explain the dual direction of controls and collection cycle as,