Which is NOT typically used as audit evidence when testing revenue recognition?

Which is NOT typically used as audit evidence when testing revenue recognition?

• A. Anonymous tips from customers
• B. Documentary evidence
• C. Recalculation
• D. Confirmation

Answer: (A)

Evidence reliability drives how auditors test revenue recognition. Documents such as contracts and invoices provide source data that substantiate recorded revenue. Recalculation checks the math behind revenue recognition, ensuring amounts, discounts, and timing are correct. External confirmations from customers offer independent verification of receivables and terms, supporting the accuracy and existence of revenue. Anonymous tips from customers, on the other hand, lack verifiability and can be biased or incomplete, making them an unreliable basis for drawing conclusions about revenue recognition. If tips raise concerns, auditors pursue corroborating evidence from more reliable sources, but tips alone aren’t considered suitable primary audit evidence for revenue testing.

Evidence reliability drives how auditors test revenue recognition. Documents such as contracts and invoices provide source data that substantiate recorded revenue. Recalculation checks the math behind revenue recognition, ensuring amounts, discounts, and timing are correct. External confirmations from customers offer independent verification of receivables and terms, supporting the accuracy and existence of revenue. Anonymous tips from customers, on the other hand, lack verifiability and can be biased or incomplete, making them an unreliable basis for drawing conclusions about revenue recognition. If tips raise concerns, auditors pursue corroborating evidence from more reliable sources, but tips alone aren’t considered suitable primary audit evidence for revenue testing.