11: Performing an audit engagement

Question 1

Revenue approach

Answer 1

• Discuss with management reason for change in revenue - reasonable
• Obtain a breakdown of revenue in FS and trace to GDN pre-YE - occurence
• Inspect sample of GDN and trace to corresponding sales invoices to ensure completeness.

Question 2

Trade receivables approach

Answer 2

• Obtain direct confirmation of a sample of TR at Y/E to confirm existence and right to receive cash
• Review cash received after Y/E which relate to Y/E TR to confirm valuation
• Review aged receivables listing to identify overdue balances and discuss with management the basis for any allowance against receivables to ensure reasonable.
• Inspect post year end credit notes to identify if they relate to CY invoices to ensure valuation and rights.
• ## Obtain written representation regarding allowance against receivables to confirm completeness and reasonableness.