Audit Procedures for the Revenue and collection cycle
What account balances are included in a revenue and collection cycle? What specific control procedures should be in place and operating in internal control governing revenue recognition and cash accounting? What assertions are made about classes of transactions and events in the revenue and collection cycle?© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/accounting/audit-procedures-for-the-revenue-and-collection-cycle-7g72
...s for a Changing Environment, Fifth Edition - Rittenberg, Schwieger
Next we can review the revenue recognition principles which state that revenue is not recognized until it is realizable and earned. To apply that concept, it is important that the following criteria are met:
1. Persuasive evidence of an arrangement exists.
2. Delivery has occurred or services have been rendered.
3. The seller's price to the buyer is fixed or determinable.
4. Collectibility is reasonably assured.
Auditing Concepts for a Changing Environment, Fifth Edition - Rittenberg, Schwieger
The internal control procedures over the revenue cycle begin with an understanding of the system. There can be wide variances in the procedures because of differences in product, industry, geographic distribution, delivery methods and others issues. First, a system that ...