Audit of revenue: which procedure tests completeness through analytical procedures?

• A. Compare monthly to previous year
• B. Recalculate VAT
• C. Inspect fixed assets
• D. Confirm bank balances

Answer: (A)

Analytical procedures in revenue focus on plausible relationships and trends to spot omissions. Comparing monthly revenue to the same period in the previous year uses a trend benchmark to detect unusual shortfalls or consistent gaps. If revenue is incomplete, monthly totals may be systematically lower than the prior year or show unexpected dips, triggering further inquiry or more detailed testing. This directly targets completeness—whether all revenue that should have been recorded was included in the period.

Recalculating VAT checks the accuracy of the tax calculation on recorded sales, rather than whether all sales were recorded in the period. Inspecting fixed assets relates to existence and valuation of assets, not the completeness of revenue. Confirming bank balances tests existence of cash and bank accounts, not whether revenue was fully captured.