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'The Primary Risk for Auditors Surrounding Revenue Is the Risk

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Essay

'The primary risk for auditors surrounding revenue is the risk that recorded revenue is overstated by managers'.J.Godfrey,et el,'Accounting Theory',7th Ed.p.315.Give three examples of ways in which revenue can be overstated and make some suggestions as to how auditors can improve their auditing techniques in this area.


Definitions:

Quorum Requirements

The minimum number of members needed to be present for a group or organization to conduct official business or make decisions.

Business Judgment Rule

A legal principle that protects corporate directors from liability for decisions made in good faith, assuming they were informed and believed the decisions were in the company's best interest.

Board Of Directors

A group of elected or appointed members who jointly oversee the activities of a company or organization.

Shareholder's Right

Legal entitlements and powers granted to shareholders of a company, such as voting on corporate matters and receiving dividends.

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