Revenue Audit Case Study Of Z Group Trading Company

According to the auditing reports of listed companies,94 A and H stocks companies disclosed a total of 242 key audit items in the 2016 annual report,including 31 items related to revenue recognition,accounting for 13%.It can be seen that the revenue as an intuitive factor reflecting the company's operating performance has attracted the attention of investors,company owners and management.Certified public accountants will use revenue as the key audit area to reduce audit risk.However,due to the complexity of business operations,it brings certain difficulties to revenue audits.Group Trading companies are one of them.Compared with pure trading companies that directly perform purchases and sales,such trading companies are buying and selling platforms of the parent company group.The group trading companies mostly invest in the related products of the industry in which the parent company of the group is located,and are responsible for the procurement and sales business of the parent company group.In addition,the Group's internal distribution trading companies independently accounted for the effect of circulation and profitability,as the total value of the distribution scale of the group trading company reflects the operating scale of the parent company group.The revenue of the group trading company often reflects its parent company.Group business performance.This paper takes a large-scale group trading company with complicated trading links as an example to analyze the research results of revenue auditing at home and abroad,summarizing the risk assessment and risk response measures for revenue auditing at the theoretical level,and investigating the auditing procedures for revenue audits of trading companies.The revenue audit of the Group Trading Company put forward countermeasures and suggestions for dealing with audit risks.The means used by the case companies to manipulate revenue mainly included the fact that multiple subsidiaries within the Group and the Group's external companies had inflated their revenue through mutual purchase and sales transactions and issued real invoices due to input.In deducting the amount of tax and output tax,enterprises actually exchange huge revenue data at the expense of a small amount of tax;in addition,they act as “middlemen” through transactions that have no reason to intervene in other companies,thereby inflating revenue data.These two types of relatively subtle means of manipulating revenue are extremely common in trading companies.In view of the insufficiency of CPAs in the case company's revenue audit,this paper believes that CPAs should carefully assess the rationality of revenue recognition,pay attention to the governance level and pay attention to the selection of audit strategies,such as the expansion of the application of analytical procedures.The firm should strengthen the quality control of revenue auditing,especially the connection of the audit standards of revenue of the group trading companies under the new revenue criteria;at the same time,it should do a good job in the development,improvement and application of the audit information system in the era of big data.