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Hi Kim,
When auditor is designing SAP, they have to develop realistic expectation about such account right?
Based on this concept, I am struggling to understand what ISA 520 A15 is talking about…Also, what does it mean by “degree to which information can be disaggregated”?
Thank you,
CJSuppose you wanted to do a “proof in total” for revenue to compare against recorded (actual) revenue. Average retail price of all products x volume of sales for a retailer would fall well short of a “realistic expectation” because it ignores discounts (in selling prices) and a mere average of selling prices takes no account of different volumes that would attach to each price.
Disaggregation would be to analyse total revenue (both actual, and in the expectation) by major department/product type.
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