ACC 5400 Chapter Notes - Chapter 10: Accounts Payable, Accounts Receivable
30 Oct 2018
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Revenue: fictitious revenues, premature revenue recognition (e. g. , holding the books open, bill- and-hold, multiple element arrangements, manipulation of adjustments (e. g. , sales returns, under-accrue bad debt, presumed that revenue poses a risk of fraud in every audit. Perform procedures at or closer to year-end. Use electronic tools to help evaluate entire populations. The auditor considers whether misstatements identified during the audit are indicative of fraud. When fraud is suspected, the auditor gathers additional information to determine whether fraud actually exists. Even immaterial misstatement caused by fraud could be important depending on who was responsible. Informational inquiry is used to obtain information about the facts and details that the auditor does not have. Assessment inquiry is used to corroborate or contradict prior information. Interrogative inquiry is often used to determine if the individual is being deceptive or purposefully omitting disclosure of key facts, events or circumstances. All frauds identified: to an appropriate level of management.
