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Evidence

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Evidence

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by Kim Smith.
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  • November 2, 2019 at 12:13 pm #551440
    vavneetb
    Participant
    • Topics: 175
    • Replies: 123
    • ☆☆☆

    Hi

    Q: as part of going concern you have reviewed that cash flow forecast based on the assumptions of significant increases in revenue:
    Answer: email correspondence between sales director and potential new customer
    -a review of board minutes showing details of new customer won
    -A review of the post year end sales and the order book
    -A review of post year end sales and order book
    -discuss with the management regarding their plans for obtaining new customer

    ANSWER- A REVIEW OF POST YEAR END SALES AND ORDER BOOK.

    I chosen email correspondence with director and new customer
    Doubt: this is a most reliable evidence,no?
    Post year end sale and order book- there could be chance that they are just recording transaction just to show high revenue?

    November 2, 2019 at 1:44 pm #551444
    Kim Smith
    Keymaster
    • Topics: 135
    • Replies: 8309
    • ☆☆☆☆☆

    An order book records sales orders received from customers (that are to be fulfilled at a future date). The mere prospect of a potential customer (who hasn’t placed any order yet) would be far less reliable in supporting an assumption about a significant increase in revenue reflected in a cash flow forecast. If there was a signed contract with a new customer that committed to a volume of sales that would be good evidence – but it isn’t an option here.

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