8 final audit Search AutoSave om File Home 6 insert Draw Design Layout Reference Mailings Review View Help Share Comments Question 3 You are the senior auditor with KPMG Oman. You went to the office of your new client Al Faj LLC Muscat with your team to audit their recent financial statement (2019). The manager assigned you the verification of transactions related to revenue recognition. Your client is specialised in large construction contract across Oman When you checked the books of account, some of the transaction you found that the company received advance payment from customers, but they considered it as revenue recognised for the year. When you n ed this with the financial manager, he sand that it is a usual practice with the firm. You have collected more details of revenue of the company for last few years as follows. 2013 2012 2015 2016 2017 2018 2019 of contract 75% 65% 70% completed for the 2.5 Million 45 Million 3 Million 3.5 Million 4 Million 2 Million $6 Million recognised (RO) Gross profit (RO) Net Profit 625,000 94,000 1125,000 170,000 750.000 115,000 875,000 140,000 1000,000 625,000 155,000 100,000 1960,000 300,000 You are required to 1. Based on the analysis, what is your conclusion about the revenue of the client for the audited period? Give reason for your answer Marks) 2. How do you decide suitability of analytical procedure for a pens ion? (2 Marks) 3. Based on the result of analytical procedure, can an auditor make conclusion about material misstatement iting the above example? (3 Marks) rocus blo 10:09 PM 3465 words OREngine naden 8 final audit Search AutoSave om File Home 6 insert Draw Design Layout Reference Mailings Review View Help Share Comments Question 3 You are the senior auditor with KPMG Oman. You went to the office of your new client Al Faj LLC Muscat with your team to audit their recent financial statement (2019). The manager assigned you the verification of transactions related to revenue recognition. Your client is specialised in large construction contract across Oman When you checked the books of account, some of the transaction you found that the company received advance payment from customers, but they considered it as revenue recognised for the year. When you n ed this with the financial manager, he sand that it is a usual practice with the firm. You have collected more details of revenue of the company for last few years as follows. 2013 2012 2015 2016 2017 2018 2019 of contract 75% 65% 70% completed for the 2.5 Million 45 Million 3 Million 3.5 Million 4 Million 2 Million $6 Million recognised (RO) Gross profit (RO) Net Profit 625,000 94,000 1125,000 170,000 750.000 115,000 875,000 140,000 1000,000 625,000 155,000 100,000 1960,000 300,000 You are required to 1. Based on the analysis, what is your conclusion about the revenue of the client for the audited period? Give reason for your answer Marks) 2. How do you decide suitability of analytical procedure for a pens ion? (2 Marks) 3. Based on the result of analytical procedure, can an auditor make conclusion about material misstatement iting the above example? (3 Marks) rocus blo 10:09 PM 3465 words OREngine naden