How Do I Become a Revenue Accountant?

Revenue fraud refers to the reduction of the authenticity of income data due to the company's intentional behavior, which reduces the authenticity of corporate economic activity data.

Income fraud

Right!

Revenue fraud refers to the reduction of the authenticity of income data due to the company's intentional behavior, which reduces the authenticity of corporate economic activity data.

Chinese name

Income fraud

Object

enterprise

Corresponding

Reduced data authenticity

Attributes

Business economic activity

Income fraud is nothing more than two situations: one is a false income reduction, and the other is a false income increase. The main purposes of income fraud are:

(1) Tax evasion or fraud to obtain the maximum income. The company intentionally underreports or underreports the business income used as the basis for tax calculation to achieve the purpose of underpayment or non-payment of taxes. This is more common in small private enterprises. see;

(2) To create conditions for future profits, which mainly appear in companies planning to go public or companies that perform performance appraisal, usually hiding income to reduce the base;

(3) Cater to market expectations or specific regulatory requirements. For example, we can welcome the expectations of financial analysts on the company's performance in the joint venture market, or meet the "threshold" indicators set by regulators as a prerequisite for specific behaviors.

(4) Maximize private returns based on financial performance. For example, when the private remuneration of management is directly linked to the financial performance of the audited entity, it often leads to management's inflated income for the purpose of maximizing private remuneration.

1. Intentionally fictitious economic business and compiling false accounting entries. Business fictitious customers or virtual transactions based on real customers. The fictitious economic business is simulated in accordance with normal sales procedures, including forging customer orders, sales contracts, warehouse receipts, shipping documents, and issuing sales invoices approved by the tax department. Some companies make fictitious sales through customers with transactions, so that their income is far greater than their real income. Waiting for the next year to return or deal with special VAT invoices will not increase the tax burden but also increase the income.

2. Improper division of the sales period and arbitrary adjustment of revenue recognition time. The company often adjusts the income entry time according to the operating situation to achieve the purpose of "have already made up for the apology" and smooth the profits. Revenue recognition in advance is mainly by means of invoicing in advance. Revenue from goods sales without transfer of ownership, income from unfinished and inter-year labor services, and income from royalties collected once but required to provide subsequent services are all recognized as current income. The deferred and concealed income confirmation mainly adopts the postponed invoices and warehouse receipts to postpone the receipt of the sales income of the goods that have been transferred. The completed or progressed labor income is not invoiced, and the labor contract period is forged to hide income.

3. Abuse or change accounting policies at will. Enterprises use special sales operations to manipulate revenue. For example, the sale of goods with sales return conditions. In the formal sales contract signed with the customer, the company does not mention the return conditions, which may mean that risks and rewards have not been transferred. Instead, it will Such matters are written in supplementary agreements. The supplementary agreement is used to conceal the fact that risks and rewards have not been transferred, and the revenue is recognized in accordance with the terms of the formal sales contract regardless of the provisions of the supplementary agreement. Another example is the "sold-for-new" product sales business. Recycling products should be purchased in accordance with regulations. The sales revenue of the products sold should be determined at the same period as the new product's sales price. The purchase price of the old goods should not be deducted, but the enterprise uses the difference to account Regulate income.

I. Risk assessment is the premise and basis of income audit

(1) The new auditing standard penetrates the idea of modern risk-oriented auditing, and regards risk assessment as the premise and basis of the entire auditing work. In the income audit, whether the risk can be reasonably assessed will become a key factor in evaluating the audit quality of the firm and the professional competence of the CPA. Fully understand the audited unit and its environment, this is the starting point of audit work. Talk with the audited management, management, financial personnel and other persons familiar with the situation of the audited unit to understand as much as possible of the audited unit and the environment in which it is located, and to determine whether accounting fraud will occur in the audited unit. Judge. Understand whether the external environment in which the audited unit is located is difficult, and whether the audited unit's survival is difficult. Understand whether the operating performance indicators set by the management of the audited unit for the management are abnormally high, and make management face abnormal pressure. Understand whether the audited unit's reputation in the industry is good.

(2) Assess the internal control related to income. Imperfect internal control of the enterprise is the opportunity sought by fraudsters. The CPA should focus on reviewing whether the company's revenue-related internal control is complete, whether it has been effectively implemented, whether there is a situation where management overrides internal control, whether incompatible responsibilities have been separated, and whether there are Complete approval procedures and consistent implementation. In addition, in the era of information-based audit, when auditing the paperless accounting information system, the CPA should pay attention to the understanding and testing of the internal control of the enterprise, and pay particular attention to the understanding and testing of some control procedures in the system operation. Requires computer experts.

Second, use more substantial analysis procedures

In the income audit, in addition to traditional analytical data, such as the comparison of current period data with historical data, industry data, and calculation of gross profit margin of important products, it is more important to use non-traditional analytical data. First, compare operating income with accounts receivable and cash flow. Generally, an enterprise's inflated income does not generate actual cash flow. The contradiction between operating income and cash flow data is likely to exist an inflated income behavior. Secondly, income can be compared with the size and production capacity of the enterprise. If the income is much higher than the size and production capacity of the enterprise, it may indicate that the income has been inflated. In addition, for consumer goods manufacturing companies, revenue can be compared with market share, and the company's income will eventually be reflected in the market. If it is difficult to find traces of corporate products in the consumer goods market and the company has a large amount of income, it is possible Inflated income.

Third, improve the substantive audit procedures

(1) Strengthen the audit of corresponding receipts. False income is usually accompanied by false receivables, and the implementation of a letter of verification procedure for the receivables is an effective means of finding false income. In order to improve the effectiveness of the verification process, the certified public accountant should exercise due care when using the verification address provided by the audited unit. The certified public accountant can check the customer's name and address provided by the audited unit with the records on the sales invoice, and can also use the Internet, Yellow Pages, etc. to obtain the address, email address, fax, telephone, etc. of the certified unit and the audited The relevant inquiry address provided by the unit shall be checked. After obtaining a reply letter from the electronic medium or by fax, the CPA should also request a written reply letter, keep the reply letter envelope as audit evidence, and pay full attention to the source of the reply letter. When a certified public accountant believes that there may be a tacit understanding between the audited entity and its key customers, the certified public accountant should verify and communicate with the accounting firm that audited the key customers on relevant issues to confirm its authenticity.

(2) Strengthen the audit of monetary funds. False income can usually be found in the bank statement's flow records. Therefore, paying attention to the audit of monetary funds is a shortcut to find false income. Recovery of current sales income and credit sales receivables are two major sources of corporate income. For a large amount of cash sales, the CPA should track the flow of bank statements. Obtaining bank statements and bank inquiry letters is a standard forensic procedure for CPAs to review bank deposits. The confirmation of the bank deposit balance should be based on the inquiry process. In order to ensure the validity of the inquiry, the certified public accountant should seek the cooperation of the audited unit to visit the bank in person for important and abnormal bank accounts.

(3) Strengthen the cut-off test of operating income and pay attention to relevant records of future returns. The basis of the business income cut-off test is the principle of the company's revenue recognition. The key to the cut-off test is to check whether the invoice issuance date or the date of receipt, the date of accounting, the date of delivery, or the date of labor service is in a common accounting period. The cut-off test method for verifying whether the audited unit has more than one income is generally to check the bookkeeping vouchers from several days before and after the statement date, and check the invoice stubs and shipping vouchers to verify whether the recorded income is in the same period and has been invoiced goods. There are generally two methods for verifying whether the audited unit underestimates revenue: one is to extract a number of sales invoice stubs issued before and after the reporting date, trace it to the shipping voucher and account records, and find whether there is missing income; The shipping voucher before and after the statement date is traced to the invoice stubs and book records to find whether there is any miscalculated income. In addition, the overestimation of the company's revenue often manifests itself as a return of sales. Therefore, we should pay attention to whether there are large or continuous returns after the balance sheet date to verify the authenticity of sales income during the reporting period.

(4) Pay attention to the actual logistics transfer procedures. Tracking down the perpetual inventory records of inventories and paying close attention to the actual logistics of enterprises is also an important means of discovering false sales income. The company's production and operation activities are a collection of complex activities including procurement, production, warehousing, and sales. These activities usually involve planning, purchasing, production, warehousing, and sales departments. The circulation of inventory involves almost every department mentioned above. And links, fabrications made out of thin air are generally not accompanied by real inventory circulation, so spot checks of inventory records such as inventory purchases and product warehousing can often effectively reveal false sales revenue.

(5) Supported by the review results of other projects. The entire production and operation process of an enterprise is a complete chain. If any link is not connected, it will provide clues to our review work. Therefore, the CPA should pay attention to the increase and decrease of related issues caused by the increase and decrease of sales. If the increase or decrease of sales will cause the increase or decrease of packaging materials, utilities, etc .; if the company has its own transportation department and is responsible for free shipping and sales of goods, then the transportation costs should be in the same direction as the increase and decrease of enterprise income; in a highly competitive market situation The increase in sales is often accompanied by an increase in marketing expenses. Therefore, CPAs can further prove the rationality of income through audit evidence obtained through "packages", "manufacturing expenses-utilities", and "sales expenses".