The revenue cycle is a major cycle for most companies. Accounts receivable, revenue, and other accounts are tested through this cycle. Often there are misstatements found, including errors and/or fraud by the client.
CONCEPT REVIEW: It is important in testing any cycle, especially revenue, to realize that misstatements will occur and to try to distinguish between errors and fraud
1. Many instances of misstatement are based on the inappropriate recognition of_
2. One way to avoid misstatement of revenue is to ensure the client has proper
3. Revenues are deemed to be earned when the company has what it must do to fulfill its obligation
4. Side can substantially alter the terms of a sale.
5. ___ needs to be assured in order to recognize revenue.

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andromache andromache · Answer 1 · 2020-12-07T03:13:22+01:00

Answer and Explanation:

1. The misstatement would depend on when there is inappropriate revenue recorded

2. For avoiding the revenue misstatement, the client should have to cut off the policies

3. The revenues are earned at the time when the company achieved or accomplished for fulfiling its obligation

4. The side agreements could modify the terms of sales

5. For recording the revenue, the collectibility needs to be confirmed