Economics Essay

1234 Words Oct 5th, 2012 5 Pages
According to (Weygandt, at el 2002), the fundamental assertion underlying the use of diagnostic methods involves the study of monetary ratios as a suitable option to the analysis of irregular fluctuations, statistical analysis of the monetary information could result in the detection of biased information in the process of preparing financial statements. Possible associations between data might logically exist and go on, and that the methods fail replace analysis of balances and transactions. When determining whether transactions are recorded, the bearing of the audit analysis ought to be from the general ledger balances, adjusted trial balances, original source materials, and the general journal entries. The technique of sampling may be …show more content…
There are four intrinsic risk factors which might influence the revenue process, industry-related factors, the difficulty and contentiousness of revenue detection issues, the complexity in carrying out auditing process of transactions and account balances, and understatements recognition prior to auditing. (Berry, 2011).
The significance to managing risk assessment aims at understanding and documenting the revenue development through a reliance method, Planning and performing tests of controls on income transactions, Setting and documenting the control risk for the revenue development. Assertions concerning classes of transactions and proceedings for the time under audit period, revenues and money receipt transactions and actions which occurred have been recorded and should relate to the business. Ensuring that all the financial transactions that should have been recorded are recorded and that are properly authorized. The amounts and all the data pertaining to revenue recorded and money receipt statements and events are recorded properly in their correct accounting period. Assessment and allocation disclosure to examine the results of confirmations and review adequacy of allowance for uncollectible accounts are necessary to review financial records for appropriate awarding and disclosure of account receivables. A positive confirmation is required to show whether customers indicate their agreement with the quantity payable to the

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