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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Caving Co (Mar/ Jun 2017)
Dear sir,
I have a doubt with the audit risks part of this question.
The qn says
“Hurling Co distributes its products through wholesalers as well as via its own website. The website was upgraded during the year at a cost of $1·1m”
As an audit risk can I say that by doing so, it would mean that by relying on ecommerce heavily, it could mean security risk.. like viruses?
Also, can I say that there’s a risk that revenues may not recorded in accordance with IFRS 15, maybe the firm records it as soon as the order is invoiced, but before payment?
So maybe revenues are over valued?
Is this acceptable?
Thanks
All that is fine. Also potential risks from:
1 The incorrect accounting treatmemt of the upgrade ie capital/revenue.
2 Staff making mistakes when getting to know the upgraded system.