Listed below are audit situations that may affect the audit of receivables and revenue.
a. The audit of a machinery manufacturing company that engages in bill and hold transactions.
b. The audit of a software company that engages in multiple element agreements that involve a fixed fee for software, updates, and customer support.
c. The audit of a construction company that uses the percentage-of-completion method of accounting for contracts.
d. The audit of a manufacturing company that uses complex sales agreements that allow product returns under certain circumstances.
e. The audit of a software company whose salespeople often modify the terms of sales con- tracts with various side agreements.
For each circumstance, provide an indication of its audit significance and any special audit procedures that would result.