Financial Audit 2 - 18A3 - Auditing of Revenue

Which of the following is a major activity for the revenue cycle?

• Receive items

• Forecast production

• Record time spent on specific jobs

• Deliver or ship order

On receiving a client’s bank cutoff statement, an audit most likely would trace .....

• Deposits in transit listed in the cutoff statement to the year-end bank reconciliation

• Prior-year checks listed in the cutoff statement to the year-end outstanding checklist

• Checks dated after year-end listed in the cutoff statement to the year-end outstanding checklist

• Deposits recorded in the cash receipts journal after year-end to the cutoff statement

Which of the following is a source document associated with the revenue cycle?

• Sales order

• Deposit slip

• Credit memo

• All of the above

Confirmation of accounts receivable provides some assurance that no lapping or other manipulation affecting (a)   is being carried on.

(a)   are used by auditors to gain evidence about the adequacy of the allowance for uncollectible accounts.