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sales related bonus

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › sales related bonus

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Kim Smith.
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  • July 3, 2021 at 2:27 am #626861
    Noah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    scenario: A generous sales related bonus scheme has been introduced in the year.

    audit risk: This may lead to sales cut off errors with employees aiming to maximise their current year bonus.

    Maam by sales cut-off error we mean that employees may include the sales of next accounting period being in this one to maximise the sales of this period and hence the bonus?

    July 3, 2021 at 8:51 am #626881
    Kim Smith
    Keymaster
    • Topics: 138
    • Replies: 8457
    • ☆☆☆☆☆

    Cut-off errors can go “either way” – e.g. for a 31 Dec y/e recording a transaction in Dec that should be recognised in Jan or vice versa. Please refer to Chapter 20 for more details.

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