Documents before and after the period end (delivery notes, invoices, receipts) are compared for sales, purchases and inventory movements. Risks such as premature revenue recognition are most often uncovered by this test.
Source: BDS 330, BDS 500
Related terms
RevenueIncome arising in the course of an entity's ordinary activities.Inventory count observationThe auditor attending the entity's year-end physical count to verify the existence and condition of inventories.Substantive proceduresTests of details and analytical procedures performed on account balances, transactions and disclosures to detect material misstatements in the financial statements.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Analytical proceduresThe evaluation of financial information through analysis of plausible relationships among financial and non-financial data.
Last updated: October 31, 2026 · This definition is for general information only.