Control environment: (i) Insistent accounting policies or practices. (ii) Demands from senior management to augment revenues and earnings (iii) Absence of involvement by the accounting or finance department in transactions or in the supervision of arrangements with distributors. (Practice Alert 98-3 Revenue Recognition Issues)

Matters needing special consideration: (i) an alteration in the revenue recognition policy of the company. (ii) Sales terms do not meet the terms with the usual policies of the company. (iii) Longer duration of anticipated payment terms or installment receivables. (iv) Important sales or volumes of sales which are recorded during the or near the culmination of the reporting period. (v) Putting into use substandard contracts or agreements. (vi) Transaction with related parties. In order to reduce the danger of inappropriate revenue recognition, the audit is required to be planned and implemented with a suitable extent of professional disbelief. At the time of planning the audit,...
[ View Full Essay]