Chap010 - Chapter 10 Auditing the Revenue Process Chapter...

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Chapter 10 - Auditing the Revenue Process Chapter 10 Auditing the Revenue Process Learning Objectives Review Questions Multiple- Choice Questions Problems Discussion Cases Internet Assignments ACL Problems/ EarthWear Mini-Cases (EWMC) LO 1: Understand why knowledge of an entity’s revenue recognition policies is important to the audit. 1 24 31 34 LO 2: Understand the revenue process. 12,13, 14, 15,16 25 33 LO 3: Know the types of transactions in the revenue process and the financial statement accounts affected. 33 LO 4: Be familiar with the types of documents and records used in the revenue process. 33 LO 5: Understand the functions in the revenue process. 2,3 25 LO 6: Know the appropriate segregation of duties for the revenue process. 3 12,14 25 ACL LO 7: Understand the inherent risks relevant to the revenue process and related accounts. 4 LO 8: Know how to assess control risk for a revenue process. 5 13 LO 9: Know the key internal controls and develop relevant tests of controls for revenue, cash receipts, and sales returns transactions. 6 13,14,15, 16 25 LO 10: Relate the assessment of control risk to substantive testing. 17,18 LO 11: Know the substantive analytical procedures used to audit accounts receivable and revenue- related accounts. 7 26 LO 12: Know the substantive tests of transactions used to audit accounts receivable and revenue-related accounts. 26 EWMC LO 13: Know the tests of details of account balances and disclosures used to audit accounts receivable and revenue-related accounts. 8 19,20,21, 22,23 26,27,28, 29,30 LO 14: Understand the confirmation process and how confirmations are used to obtain evidence about accounts receivable. 9,10 20,21,22 27,28,29 EWMC LO 15: Understand how to audit other types of receivables. 11 32 LO 16: Understand how to evaluate the audit findings and reach a final conclusion on accounts receivable and revenue-related accounts. 23 26,28, 29,30 32 10-1
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Chapter 10 - Auditing the Revenue Process END OF CHAPTER MATERIALS COMPARISION CHART Number in 7 th edition Compariso n Number in 6 th edition 10-1 Revised 10-1 10-2 Unchanged 10-2 10-3 Unchanged 10-3 10-4 Unchanged 10-4 10-5 Unchanged 10-5 10-6 Unchanged 10-6 10-7 Unchanged 10-7 10-8 Unchanged 10-8 10-9 Unchanged 10-9 10-10 Unchanged 10-10 10-11 Unchanged 10-11 10-12 Unchanged 10-12 Removed 10-13 Removed 10-14 10-13 Unchanged 10-15 10-14 Unchanged 10-16 10-15 Unchanged 10-17 10-16 Unchanged 10-18 10-17 New 10-18 New 10-19 Unchanged 10-19 10-20 Unchanged 10-20 10-21 Unchanged 10-21 10-22 Unchanged 10-22 10-23 Unchanged 10-23 10-24 Unchanged 10-24 10-25 Unchanged 10-25 10-26 Unchanged 10-26 10-27 Unchanged 10-27 10-28 Revised 10-28 10-29 Unchanged 10-29 10-30 Revised 10-30 10-31 Unchanged 10-31 10-32 Unchanged 10-32 10-33 Unchanged 10-33 10-34 Unchanged 10-34 10-2
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Chapter 10 - Auditing the Revenue Process Chapter 10 re-introduces the concept of viewing businesses from a process perspective or transaction cycles. This is important to auditors as auditing divides the financial statement components into business processes or cycles in order to better manage the audit. The revenue process is generally the first process we cover in the introductory auditing class because most students have some understanding of how entities sell products or deliver services. The chapter
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