Case Study On Revenue Audit Of K Construction Company

On July 5,2017,the Ministry of Finance issued "Accounting Standards for Business Enterprises No.14-Revenue" CAS14(2017).The ordinance of the new standards not only effects the convergence of Chinese accounting standards to international standards,but also improves the comparability of accounting information quality.Since Hong Kong-listed companies first applied the new revenue standards in 2018,revenue has become an important part of disclosing important audit issues.As a vital part of building the national physical economy,the construction industry had played a key part in securing infrastructure and improving the quality and efficiency.The main business of construction companies is civil engineering.The contracts signed with customers have the characteristics of large target amount,generally irrevocable and long-lasting project cycle.It is one of the industries that are affected by the new income rules.Based on the gathering,sorting and arrange the documentary,literature research and case studies are used to find out more about the relationship between the new income standard and the new income standard,construction enterprises and income audit.And select the audit case of A accounting firm on K construction enterprise income as the research object,and analyze the audit procedures performed by A firm in each audit stage.The shortcomings of audit work are mainly reflected in the failure to test the effectiveness of internal control over enterprise cost management;Lack of review of contract transaction prices and allocation;Lack of targeted revisions to the income audit manuscript.The reason is that there are inadequacies in the allocation of audit resources,professional thinking,and the control and review of audit quality.Finally,this paper puts forward bid for A firm to improve the revenue audit process,including the following three aspects: reasonable allocation of audit resources,further improvement of audit procedure,and strengthening of quality control and supervision mechanisms.At present,the literature on the impact of the new income standard on the construction industry is relatively abundant,but there are few studies on how accounting firms identify audit risk points and implement audit procedures after the application of the new regulations.Thus,this literary works has theoretical significance.In addition,the new set was published in 2017 and put into effect in 2020.So the writing is expected to be helpful for accounting firms and auditors to deal with the standard changes in the future.