LMN Ltd., a mid-sized manufacturing company, generates revenue primarily through the sale of consumer electronics in domestic and international…

The auditor will apply the following audit procedures to verify that all sales are accurately measured as per applicable accounting standards and correctly journalised, summarised, and posted in the financial statements are: Trace a few transactions from inception to completion. (Examination in depth)Eg: Take few sales transaction, and check from the receipt of sales order to the payment of receivable balance, every underlying document to ensure if it is properly recorded at every stage and measured accurately taking into consideration all the incentives, discounts, if any. The recognition shall be according to the revenue recognition policy of the entity.If the client is engaged in export sales, then compliance with AS 11 shall be ensured.Auditor must understand client's operations and related GAAP issues e.g. point of sale revenue recognition vs. percentage of completion, wherever applicable.Compare the rate of sales affected with related parties and review them for collectability, as well as whether they were properly authorised and the value of such transactions were reasonable and at arm's length.