Question

Explain various steps involved in the verification of revenue and describe main
objectives of verification of revenues.​

Answer 1

Explanation:

Verification of revenue is extremely important and main objective is to ensure that revenue is coming from legal sources where applicable taxes are being paid and accounted for.

In the verification process there are two main stages. These include testing the revenue accounts on income statements and then checking of accounts receivable and finally comparing the both records

Answer 2

Verification of revenue includes testing revenue in the income statements

• Verification the revenue accounts in the income statements, followed by an inspection of accounts receivable on the balance sheet, are the primary steps of a revenue audit.
• Revenue recognition concerns, such as side agreements and channel stuffing, may also be investigated by the auditors. Companies frequently engage in techniques that boost revenue artificially.
• The entity's existence may be jeopardized if it does not get monetary inflows. As a result, it's critical for each organization to assess revenue or some form of money.
• It is critical for the enterprise as well as the auditor, to check the income. Auditors must also show receivables in addition to revenues.