completeness of income

All "accounts" must be those of the CLIENT - that is whose financial statements you are auditing. Imagine a charity - any charity - you must know one. Perhaps you know it sells merchandise of some sort - this is "revenue" - i.e. income received in an "exchange transaction" - i.e. I transfer goods to you/you transfer cash to me. But a charity's main sources of income will most likely be made up of donations and/or grants (IAS 20 applies). You can't record donations in a "revenue" a/c because it's not "in the normal course of business" in the sense of business - there is no exchange transaction - only the voluntary giving of donors - and it must be recorded separately Cr "Donations a/c" It is much more difficult therefore to confirm the completeness of such income in charities - although increasingly charities like donors to set up direct debits so regular transfers are made into a bank a/c. Also, in the UK, for example, because a tax payer can claim higher rate tax relief on charitable giving - charities have an incentive to obtain a record from donors in order to reclaim tax from the government. Obviously not examinable in AA but should help you think about how charities are funded.