Auditing the Revenue Process
Chapter 10 Auditing the Revenue Process
SEC SAB101: Revenue recognition
1. 有persuasive evidence 有证据
2. Delivery occurred, service rendered，东西给了服务于需求
3. Price is fixed/determinable 价格固定
4. 有collectability钱收的回来
Fraud Risk in Revenue cycle: 欺诈风险
1. Side agreement: off-book, adjust record to entice customer
2. Channel stuffing: 填塞分销渠道，造成销售假象 inflate sales by forcing product through a distribution channel
3. Related party transaction: 实质重于形式原则substance over form是指企业应当按照交易或事项的经济实质进行会计核算，而不应当仅仅按照它们的法律形式作为会计核算的依据. A business deal or arrangement between two parties who are joined by a special relationship prior to the deal.
4. Bill and hold sales: ship goods to warehouse until customer able to receive shipment
Document & Report
1. Sales order
2. Credit approval form
3. Shipping document
4. Open-order report: orders have not been fulfilled满足
5. Sales invoice: 用于bill customer
6. Sales journal: record sales
7. Customer statement: mail to customer contains detail of goods
8. A/R subsidiary ledger: ledger contains detail of transaction for each customer
9. Aged trail balance of A/R: summarize all customer balance in 8, 用 current/past due 分类
10. Remittance advice: 5&7 returned with customer payment
11. Cash receipt journal
12. Credit memo: record customer’s credit for return or concession(优惠)
13. Write-off authorization: write off uncollectable account, should authorized from treasure
Segregation of Duties: Department-duty
Credit / Bill: 否则坏账 sale to customer not creditworthy
Shipping / Billing: 否则 unrecorded sales transaction and theft of goods, unauthorized shipment
A/R / General ledger: 否则unrecorded sales transaction and theft of goods, unauthorized shipment
Cash receipt / A/R: 否则theft in cash
所以，分工需明确：
Order- receive & prepare
Credit- approve credit
Shipping- ship goods, document
Cash receipt- receive remittance 汇款
Treasury- authorize A/R write-off
A/R&IT- customer invoice, update A/R record for sale and remittance(分期付款或一次付清),
SEC SAB101: Revenue recognition
1. 有persuasive evidence 有证据
2. Delivery occurred, service rendered，东西给了服务于需求
3. Price is fixed/determinable 价格固定
4. 有collectability钱收的回来
Fraud Risk in Revenue cycle: 欺诈风险
1. Side agreement: off-book, adjust record to entice customer
2. Channel stuffing: 填塞分销渠道，造成销售假象 inflate sales by forcing product through a distribution channel
3. Related party transaction: 实质重于形式原则substance over form是指企业应当按照交易或事项的经济实质进行会计核算，而不应当仅仅按照它们的法律形式作为会计核算的依据. A business deal or arrangement between two parties who are joined by a special relationship prior to the deal.
4. Bill and hold sales: ship goods to warehouse until customer able to receive shipment
Document & Report
1. Sales order
2. Credit approval form
3. Shipping document
4. Open-order report: orders have not been fulfilled满足
5. Sales invoice: 用于bill customer
6. Sales journal: record sales
7. Customer statement: mail to customer contains detail of goods
8. A/R subsidiary ledger: ledger contains detail of transaction for each customer
9. Aged trail balance of A/R: summarize all customer balance in 8, 用 current/past due 分类
10. Remittance advice: 5&7 returned with customer payment
11. Cash receipt journal
12. Credit memo: record customer’s credit for return or concession(优惠)
13. Write-off authorization: write off uncollectable account, should authorized from treasure
Segregation of Duties: Department-duty
Credit / Bill: 否则坏账 sale to customer not creditworthy
Shipping / Billing: 否则 unrecorded sales transaction and theft of goods, unauthorized shipment
A/R / General ledger: 否则unrecorded sales transaction and theft of goods, unauthorized shipment
Cash receipt / A/R: 否则theft in cash
所以，分工需明确：
Order- receive & prepare
Credit- approve credit
Shipping- ship goods, document
Cash receipt- receive remittance 汇款
Treasury- authorize A/R write-off
A/R&IT- customer invoice, update A/R record for sale and remittance(分期付款或一次付清),