Substantive Procedures for Revenue Flashcards
Compare the overall level…
Compare the overall level of revenue against prior years and budget for the year and investigate any significant fluctuations
Perform a proof in total calculation…
Perform a proof in total calculation for revenue, creating an expectation of average price for main paint products multiplied by increased sales volumes for this year
Obtain a schedule of sales…
Obtain a schedule of sales for year broken down into main product categories and compare this to prior year breakdown and for any unusual movements, discuss with management
Calculate final gross profit margin…
Calculate final gross profit amrgin for company and compare this to prior year and investigate any significant fluctuations
Select a sample of sales invoices…
Select a sample of sales invocies for customers and agree the sales prices back to price list or customer master data info to ensure accuracy of invoices
For a sample of invoices…
For a sample of invoices, recalculate invoice totals including discounts and sales tax
Select a sample of credit notes raised…
Select a sample of credit notes raised, trace through to original invoice and ensure invoice has been correctly removed from sales
Select a sample of customer orders…
Select a sample of customer orders and agree these to the despatch notes and sales invoices through to inclusion in sales ledger and revenue general ledger accounts to ensure completeness of revenue
Select a sample of despatch notes…
Select a sample of despatch notes both pre and post year end and follow these through to sales invoices in correct accounting period to ensure that cut-off has been correctly applied
For sales made under the price promise…
Fo r sales made under the price promise, compare the level of claims made to date with the refund liability recognised and assess whether it is reasonable
