Revenue Audit examines the processes, systems and controls relating to recognition, measurement and reporting of revenue. It verifies that revenue is recorded in accordance with applicable accounting standards and reflects the economic substance of transactions.
Scope of Revenue Audit
The review includes:
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Examination of revenue recognition policies and practices
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Verification of sales transactions and supporting documentation
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Assessment of cut-off procedures and accruals
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Review of billing, collection and credit control processes
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Identification of potential revenue leakages or misstatements
Approach
A combination of analytical and substantive procedures is used:
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Analysis of revenue trends and ratios
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Testing of sample transactions across the revenue cycle
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Evaluation of system controls over revenue recording
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Reconciliation of revenue with related accounts
Reporting
Findings highlight areas requiring strengthening of revenue controls and alignment with recognition criteria under Ind AS 115 or other applicable frameworks.