Audit of revenue: which example illustrates accuracy checks?

• A. Price x quantity = net; VAT
• B. Journal entries for impairment
• C. Reconciliation of payroll
• D. Inventory count

Answer: (A)

Verifying revenue accuracy hinges on checking that the revenue amounts are computed correctly and taxed properly. Recomputing a sale by multiplying the unit price by the quantity and ensuring the correct VAT is applied directly tests the arithmetic and tax treatment that feed into the revenue figure. This kind of accuracy check helps confirm that the recorded revenue matches what was actually sold and billed.

Other options relate to different areas: impairment journal entries concern asset impairment, payroll reconciliation relates to employee costs, and inventory counts pertain to stock levels. While these are important, they do not specifically test the accuracy of revenue amounts.