AUDIT AND ASSURANCE

DPA 5043
RAHAYU BT HASSAN
REVENUE
AND
EXPENSES
 GROUP MEMBERS :
PAVITRA A/P B.MOHAN(06DAT15F2015)
SHOBA A/P SERIDARAN (06DAT15F2025)
SHUBASHINI A/P SEVARAM(06DAT15F2045)
LISANTHINI A/P VASUDEVAN(06DAT15F2060)
 REVENUE
Revenue is the income that a business has
from its normal business activities, usually
from the sale of goods and services to
customers.
Revenue is also referred to as sales or
turnover.
 Some companies receive revenue from
interest, royalties, or other fees.
 PURPOSE OF AUDITING
THE REVENUE
ORDER ENTRY - Acceptance of customer
orders for goods and services into the system
in accordance with managemaent criteria and
policies.
CREDIT AUTHORISATION – Appropriate
approval of customer orders for credit
worthinners.
SHIPPING - Shipping of delivery of goods
that has been authorised.

CASH RECEIPT- Processing of the receipt of

cash from customers.
 Evidence for revenue
 Sales of goods and services.
Payments received for goods and services.
Good returned by claims received from
customer.
Cash Receipt Customer sales
journal order

Sample Cash Receipt Journal

store sales
sales invoice Sales journal
 Credit Shipping
memorandum documents
 Audit objective
and assertion
 OCCURANCE -All revenue and cash receipt
transaction and events that have been
recorded have accurate and pertain to the
entity.

COMPLETENESS –All revenue and cash

receipt transaction and events that should
have been recorded.
ACCURACY – Amounts and other data
relating to the recorded revenue and cash
receipt transaction and events have been
recorded appropriateiy.

CUTOFF-All revenue and cash receipt

transaction and events have been recorded
in the correct accounting period.
 Audit test for
revenue
 Analytical procedures – Consits of absolute
comparisons of dollar balances with prior
year’s account balances or with budget ,ratio
comparisons and trend analysis, and
computation based on financial or operational
or data designed to predict the balance in a
general ledger account.

 Substantive procedures-Material classes of transaction,account

balances,and disclosures always required to obtain sufficient competent
audit evidence due the limitation of internal control and the subjective
nature of auditor’s judgement when making risk assessments regarding
the entity and enviroment.
 TEST OF BALANCES- Physical examination of assets,
confirmation of accounts balance,observation of the
work of clients personnel.

 EVALUATING THE COMPLETENESS ASSERTION-Tests

of balances or analytical procedures canbe
performed to efficiently verify the completeness
assertions,test of controls are not necessary for thi
purposed.
 Purpose of auditing
expenditre
To evaluate the expenses to make sure they are
necessery and in line with internal policies.
To confirmation that expenditure is incurred for
the purpose for which grant.
Ensure that expenditures confirm to relevant
provision of constituition/law/rules/ragulations.
Whether various project &their operations are
executed economically.
Requisitioning Purchasing Receiving

Account Disbursem Invoice

Payable ent processing
Evidence for expenditure
component

Request goods or service

for an authorised individual
Or department.
purchase order

All about information on goods

and services being purchased.

Supplier invoice
 Bill from supplier.
 Description and quantity
of the goods or services
provided.
voucher

To control payment

cheque  Sign by an authorised

individual.
 To make payments for
goods &services
 Audit test for
expenses
 Audit certify that an organization is using it’s money fairly
,accurately and that no fraud or cheating is occuring.
 If money is being spent,audits confirm that work or
materials were actually purchased,and reasonable price.
 Audits also verify that the amount listed includes all
involved costs.
 Accuracy is important in the adding and subtracing the
entries.
 Organization records should match bank records.
 Full and fair disclosure keeps the economy safe.
 AUDIT OBJECTIVE
AND ASSERTION
 OCCURANCE-All purchase and cash disbursement
transactions and events that have been recorded have accurate
and pertain to the entity.
 COMPLETENESS-All purchase and cash disbursement
transaction and eventsthat should have been recorded .
ACCURACY-Amounts and other data relating to the recorded
purchase and cash disbursement transaction and events have
been recorded appropriateiy.
 CUTOFF-All purchase and cash disbursement transactions
and events have been recorded in the correct accounting
period.