Reference no: EM132779765

Your client Corp A is a company engaged in the production of heavy equipment and markets its products on a business to business (B2B) basis. Goods produced by Corp A are heavy equipment such as: Excavators, Bulldozers, Mobile Cranes, Motor Scrapers, etc. There are also a number of finished products in the form of heavy equipment which are self-used by Corp A. After several years of self-use, that heavy equipment is sold, which is in the fiscal year that you are currently auditing. Corp A recorded it as sales revenue which is increased their operating profit.

Question:

Problem a. Do you think that recognize it as sales revenue is correct? Explain your answer!

Problem b. What audit objectives relate to the above case! Explain your answer!