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sales related bonus

This topic has 1 reply, 2 voices, and was last updated 1 year ago by Kim Smith.

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July 3, 2021 at 2:27 am #626861
Noah098
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scenario: A generous sales related bonus scheme has been introduced in the year.
audit risk: This may lead to sales cut off errors with employees aiming to maximise their current year bonus.
Maam by sales cut-off error we mean that employees may include the sales of next accounting period being in this one to maximise the sales of this period and hence the bonus?
July 3, 2021 at 8:51 am #626881
Kim Smith
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Cut-off errors can go “either way” – e.g. for a 31 Dec y/e recording a transaction in Dec that should be recognised in Jan or vice versa. Please refer to Chapter 20 for more details.
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