The audit partner in charge of the audit of Envoy plans to obtain evidence of the client's revenue recognition by relying on internal controls and use of analytical procedures. However, during subsequent testing of internal controls a significant number of instances occurred where revenue was incorrectly recognized immediately upon a customer's payment in advance, rather than when goods are transported.

1. Analyze the implication of the above issues in planning the audit of Envoy.

2. Prepare a draft audit strategy for revenue audit for Envoy.

Answer rating: 100% (QA)

In relation to revenue recognition issue the following audit strategies should be adopted when plann... View the full answer