Question

Explaining the approaches ( steps and tools) to audit a revenue cycle as part of a financial statement audit.

Answer 1

Answer)

1) Conduct tests of controls to find the effectiveness of operation of internal controls to find the reliability that can be placed on them.

2)Then perform cutoff procedure to identify whether all the transactions in revenue cycles are recorded in right time.

3)Then performing ratio analysis and comparing them with benchmarks to ensure that there is any unusual development or falls in revenue and obtain reason if any found.

4)Check whether there are any errors or material misstatements of any exists in the financial statements at the end of the cycle by performing the substantive procedures.