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Reperformable Revenue Cycle Procedures

The document outlines the key elements of formulating a proper standard procedure for revenue cycle management, emphasizing the importance of selecting samples and performing various procedures for each assertion. It discusses when to record revenue based on customer payment timing and provides guidance on inspecting invoices for proper cut-off dates. Additionally, it highlights the need for accurate revenue presentation in financial statements in accordance with IFRS 15.

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lisamoley53
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5 views8 pages

Reperformable Revenue Cycle Procedures

The document outlines the key elements of formulating a proper standard procedure for revenue cycle management, emphasizing the importance of selecting samples and performing various procedures for each assertion. It discusses when to record revenue based on customer payment timing and provides guidance on inspecting invoices for proper cut-off dates. Additionally, it highlights the need for accurate revenue presentation in financial statements in accordance with IFRS 15.

Uploaded by

lisamoley53
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Revenue Cycle

WEEK 6 TUT
Formulating a proper SP
3 elements of a procedure – VERB + ON WHAT + FOR WHAT
Explain where the sample is selected from (reperformable)
Other verbs – scrutinise, compare, agree, recalculate, confirm
At least 1 procedure per assertion
Accuracy will have most procedures (think price x quantity, and exceptions)
To list or not to list per assertion…
When do we record revenue?

If customer pays before you’ve If you perform before customer


performed pays

dr Bank dr Debtor/ Accrued Income


cr Income recevied in advance cr Revenue
Cut-off
1 Oct 2018 30 Sep 2019 30 Sep 2020

Select the last 20 invoices for the year ended 30 Select the first 20 invoices for the year ended 30
Sep 2019 and trace them to the corresponding Sep 2020 and trace them to the corresponding
signed customer statement and inspect that the signed customer statement, and inspect that the
date signed pertains to the 2019 financial year. date does not pertain to the 2019 financial year.
Presentation
Single revenue stream Multiple revenue streams
Inspect the disclosure in the statement of profit or Inspect the disclosure in the statement of profit or
loss and other comprehensive income (SPLOCI) to loss and other comprehensive income (SPLOCI) to
confirm that revenue is a separate line item and a confirm that revenue is a separate line item and a
separate note to the financial statements (in separate note to the financial statements detailing
accordance with IFRS 15). the different categories of revenue (in accordance
with IFRS 15).
SP

TOC

RAPS
CONC L U S I O N S

REVISIT MARK ATTEMPT CONSULT OR


ATTEMPT EMAIL
QUESTIONS

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