How do you audit the revenue cycle?

For the revenue cycle, the auditor examines the gross profit margin and the amount of growth that the company has experienced in one year. As part of the revenue cycle audit checklist, he should analyze the organization’s maximum capacity for sales if its facility and employees were fully utilized.

What are the 5 audit procedures?

There are five phases of our audit process: Selection, Planning, Execution, Reporting, and Follow-Up.

What are the 7 audit procedures?

Audit procedures to obtain audit evidence can include inspection, observation, confirmation, recalculation, reperformance, and analytical procedures, often in some combination, in addition to inquiry.

What are the 6 audit procedures?

The types of audit evidence include analytical procedures, confirmations, inquiry, inspecting records, inspecting assets, observation, recalculation, and reperformance.

What to look for in a revenue cycle audit?

Confirm credit memo and sales return activity, as well as the dates on which payments were made –perform analytical reviews of credit memo and writeoff activity by comparing to prior periods. Look for unusual trends or patterns such as large numbers of credit memos pertaining to one customer or sales person

What do you need to know about audit procedures?

In order to audit the revenues, it requires to use the combination of analytical procedures and tests of detail or substantive tests. Typically, we perform the audit of revenues in conjunction with the audit of accounts receivable.

What are the procedures for auditing sales revenue?

We usually perform substantive analytical procedures by looking at the trends from the previous months or years and the relationship between sale revenue and other independent items such as cost of sales, selling expenses and the growth of sales in the sectors.

What are the objectives of Chapter 9 auditing the revenue cycle?

CHAPTER 9 AUDITING THE REVENUE CYCLE Copyright © 2014 South- Western/Cengage Learning 9-2 LEARNING OBJECTIVES 1. Identify the significant accounts, disclosures, and relevant assertions in the revenue cycle 2. Identify and assess inherent risks of material misstatement in the revenue cycle 3.