Publication Details
Abstract
This article examines financial risks associated with revenue recognition and proposes improved audit procedures for detecting them. The theoretical framework synthesizes risk-oriented auditing, the relationship between materiality and audit risk, the selection of audit evidence, the classification of financial risks, and the construction of a risk profile. The analysis shows that the growth of trade receivables, a high share of customer advances, declining gross margin, pressure from current liabilities, and reliance on short-term financing increase the risk of premature or weakly supported revenue recognition. Based on this, an improved system of audit procedures was developed, including cut-off testing, external confirmation, functional contract analysis, targeted journal-entry testing, and in-depth counterparty review.