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Hi Mr Smith,
how the occurrence will be asserted by this:
Compare the reported revenue figure to the budget and to the previous year, investigating any significant differences
Thanks,
The assertion of occurrence for transactions is “equivalent” to existence for balances. Therefore the starting point is what is recorded in the financial statements.
Suppose budget was $2.2m and last year $2m. If reported is $2.1m it seems reasonable that these sales occurred. No one is suggesting that this analytical procedure alone would provide sufficient evidence of occurrence, but it wouldn’t suggest otherwise.
Consider instead that reported revenue is $4.5m … would you think it reasonable that it all occurred?
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