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please give me answer as soon as possible. If you give me right answer i will give you thumbs up. Promise. Question 3 You are
please give me answer as soon as possible. If you give me right answer i will give you thumbs up. Promise.
Question 3 You are the senior auditor with KPMG Oman. You went to the office of your new client Al Fajar 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 enquired this with the financial manager, he said 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. Year 2013 2014 2015 2016 2017 2018 2019 % of contract 65% 85% 70% 75% 75% 65% 70% completed for the year Amount of revenue 2.5 Million 4.5Million 3 Million 3.5 Million 4 Million 2.5 Million 5.6Million recognised (RO) Gross profit (RO) 625,000 1125,000 750.000 875,000 1000,000 625,000 1960,000 Net Profit 94,000 170,000 115,000 140,000 155,000 100,000 300,000 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. (5 Marks) 2. How do you decide suitability of analytical procedure for a given assertion? (2 Marks) 3. Based on the result of analytical procedure, can an auditor make conclusion about material misstatement siting the above example? Marks)Step by Step Solution
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