1. You are a member of the audit team that is assigned to audit a major client, Wawasan Group Berhad. The audit senior has assigned you to audit the revenue business process.

Required:

1. Discuss the misstatements that are likely to occur in the revenue business process and its consequences.
2. Explain how the auditor uses accounts receivable confirmations to gather evidence regarding the account balance.

2. You have been assigned by the audit senior to carry-out the audit of the revenue business process of a major client, Sunbear Berhad. Your client is a major distributor of childrens toys.

Required:

1. Discuss management assertions for the revenue business process. Your answer should include a discussion of the most important assertion for this business process.
2. Explain the inherent risk in the revenue business process. Illustrate when it would be high or low for an audit client.
3. Explain how the auditor evaluates allowances for doubtful accounts.