5 Thyme Co
Generally up to 1½ marks for each well explained matter/point and 1 mark for each well explained action
recommended.
(a) (i) Revenue recognition
Matters:
– Materiality
– IFRS 15 –Satisfaction of performance obligations
– Control not yet passed to client
– Revenue recognition and management bias
– Revenue recognised too early and, therefore, misstated
Actions:
– Request adjustment to financial statements
– If refused communicate with those charged with governance
– Obtain written representation
Maximum marks 7