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Risk at Assertion Level - Coggle Diagram
Risk at Assertion Level
Revenue
COACC
Completeness, Occurrence, Accuracy
-Dependence on IT systems increases risk of errors
-Dependence on outsourcers increases risk of errors
-Risk cash transactions aren't recorded (misappropriation of funds)
-Risk revenue is calculated wrong due to complex nature
-Revenue not recognised at FV due to present value or related parties
Occurence
-Credit card fraud
-Ficticious sales included
-Pre-paid revenue
-Related party transactions
-Govt. grants incorrectly recorded as revenue
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Inventory
VERC
Existence
-Stored in different locations may result in double counting
-Consignment stock may be double counted/ incorrectly included
-Stolen goods included
-Goods not there are included
Rights & Ownerships
-Goods in transit may not have passed into ownership
-Goods on consignment might not belong to entity
-Goods may be held for customers until ready to collect therefore incorrectly included
-Shared facilities; recording stock that isn't yours
Completeness/Cut-off
-Consignment items may not be included
-Items ordered recognised in wrong period
-Goods in different locations may not be included
Accuracy
-Imports need to be at spot
-Transport & customs duty
-Misallocate costs to finished products or WIP
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Accounts Receivable
VERC
-
Completeness/Cut-off
-Debtors may not be recorded in year-end balance
-Debtors may be included in incorrect period
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Valuation & Accuracy
-May not be at Present Value
-Incorrect calculation of amounts owed
-Inclusion of bad debts written off
-Understatement of allowances for doubtful debts
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PPE & IP
VERC
Existence
-Property in transit/ different locations may not exist
-Sold assets still included
-Capitalisation appropriate?
Rights & Obligations
-Leased assets; financed vs operating
-Including assets for which risks & rewards haven't passed
Completeness
-Improvement costs not capitalised?
-Assets in diff locations may not be included
-Internally generated assets not capitalised
-Borrowing costs not capitalised
Valuation & Accuracy
-Revals overstated
-Depreciation, RV, UL, Components
-Costs incorrect (transport, duties, spot rates etc.)
-Impairment not recognised
-Not at FV when acquired in BC