Western Transport Limited (WTL) is a national trucking company. When goods are shipped, the shipment process is initiated using a waybill, recording weight, size, and number of goods moved. When the trucker records arrival at the destination, the waybill signed by the customer is scanned into the computer system and is used to trigger an automatic billing process. At month end, the waybill history file is interrogated and a revenue accrual is made to account for outstanding waybills. This accrual is based on the following formula:

Required Identify the different methods that could be used by the auditor to determine the reasonableness of the monthly revenue accrual or to place reliance on the revenue accrual method.

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DAYS OUTSTANDING PERCENT ACCRUED 5 days and greater 4 days 100 75 3 days 2 days 1 day 50 25