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182PROCESS OF IDENTIFYING THE SIGNIFICANT ACCOUNTS IN
THE REVENUE CYCLE
Shirinov Uchkun
PhD, the head of the chair of "Auditing" of SamlES Najmiddinov Dilshod
master of SamIES
Abstract. This article examines the ways of identifying the revenue of a company and how to audit it. These days, international standards of accounting are being applied in all spheres of economic organizations. Thus, this article tries to explain the identification of revenue cycle according to the International Standards of Financial Reporting.
Keywords: Revenue cycle, income-related statement, cyclical approach, internal control, loan approval, invoice, sales.
Annotatsiya. Ushbu maqola xalqaro standartlar asosida buxgalteriya hisobida kompaniyaning daromadlarini aniqlash usullarini va uni auditda qanday tekshirishni ko'rib chiqadi. Ayni kunlarda buxgalteriya hisobining xalqaro standartlari tadbirkorlik sub'ektlarining barchasida qadam ba qadam qo'llanilmoqda. Shunday qilib, ushbu maqola Moliyaviy Xisobotning Xalqaro Standartlariga muvofiq daromadlar aylanishini aniqlashni tushuntirishga harakat qiladi.
Kalit so'zlar: Daromadlar aylanishi, daromadlar bilan bog'liq hisobot, tsiklik yondashuv, ichki nazorat, kreditni tasdiqlash, schyot-faktura, sotish.
Introduction. This article examines the process of the revenue cycle and how to identify it. The revenue cycle includes the process of receiving a customer's order, approving a loan for sale, determining whether goods are available for shipment, delivering goods, invoicing to the customer, receiving cash, and assessing the impact of this process on other related accounts such as accounts receivable, inventory, and sales commission expenses. The most significant accounts include revenue and accounts receivable in the revenue cycle. The auditor is likely to receive evidence relating to each of the statements of the financial statements for both accounts. However, some statements are more relevant than others for specific accounts and customers. An income-related statement of existence can be one of the most important statements for many clients, especially if the client has incentives to overstate income. As for accounts receivable, the most relevant statements are usually availability and valuation. Statements that are considered more relevant are statements for which the risk of material misstatement is higher and for which more and better audit evidence is required.
Material and methods. The cyclical approach recognizes the relationship of accounts. Audit evidence relating to the existence and valuation of accounts
receivable also provides evidence of the existence and valuation of recorded revenue and vice versa on the contrary. When studying purchase and sale transactions and internal control over revenue processing, the auditor also collects evidence of credit authorization and evaluation of registered transactions. Purchase and sale transactions often serve as the basis for calculating commissions for sales personnel. The process of generating income may differ for each client, and each client may have more than one process of generating income. For example, the sale of a shirt in a department store is different from the sale of construction equipment, and both are different from the sale of books on an Internet site. Online sales and retail sales most likely require payment in cash or by credit card. The sale of construction equipment is most likely related to accounts receivable or the loan can be provided by a third party. Some purchase and sale transactions involve long-term contractual agreements that affect when and how revenue will be reflected. Some organizations create detailed paper logs to document sales; others keep an audit log only in computer form. Despite these differences, most sales transactions include the procedures and related documents shown in Figure 1.
Figure 1. Documents generated in sales transactions
Results. We can indicate these steps to recognize revenue.
1. Confirm a client purchase order processing begins with the receipt of a purchase order from a customer or the preparation of a sales order by a salesperson. The order might be taken by
• checkout counter;
• making a call to a client;
• answering a toll-free call by the service agent;
• receiving the purchase order information electronically from the customer's computer;
• directly receiving the purchase order.
For example, consider a customer service agent for a catalog merchandiser taking an order over the phone. The information is typed into a file on a computer, and every single transaction is uniquely identified. The computer file (often referred to as a log of transactions) contains all the information for sales orders taken over a while and can be used for control and reconciliation purposes.
2. Inventory status requirements. Many organizations are prone to computer ailments that can inform the customer of the required inventory status and likely delivery date. The customer is informed about the approximate ordered goods, as well as about the set delivery date.
3. Creation of a backorder. If an item is to be re-ordered for subsequent shipment to the customer, a backorder confirmation is prepared and sent to the customer. If the return order is not completed within the specified time, the customer is often given the option to cancel the order. An accurate list of items ordered in reverse order must be maintained to meet current customer demand and future inventory requirements. Adding a separate field to individual inventory records to display items ordered in reverse order usually accomplishes this.
4. Get loan approval. A formal loan approval policy is applied by organizations to minimize credit losses. Some organizations eliminate credit risk by requiring payment by credit card. Others require a check to accompany the order, and typically they delay shipment until the check has passed through the banking system to ensure the payment is collectible.
Many industrial organizations issue loans to their customers because it is a more convenient way to do business. However, the organization making the sale assumes some risk that it will not ultimately receive payment from the customer. There are many reasons for non-payment, ranging from (a) dissatisfaction with goods received or returns to (b) inability to make payments due to financial constraints. Therefore, organizations need to have a credit approval process that (a) evaluates the creditworthiness of new customers and (b) updates the creditworthiness (including payment terms) of existing customers. Credit approval may include checking sales orders and customer credit information with a computer program that contains current account balance information and credit rating information to determine whether credit should be granted to the customer. Most organizations set credit limits for
customers and develop controls to ensure that a pending sale does not cause a customer to exceed the credit limit.
5. Preparing to ship and pack documents. Many organizations have computerized the process of distributing goods from the warehouse. Picking receipts (documents that tell the warehouse staff the most effective sequence for selecting items to ship and the location of all items to be shipped) are generated from a sales order or sales order. Separate packing slips are prepared to be inserted with shipment and to verify that all items have been shipped. Some organizations place a barcode on the shipping container that identifies the contents. The barcode can be scanned by the customer to record the receipt of the order to purchase. Separate packing slips are prepared to be inserted with shipment and to verify that all items have been shipped. Some organizations place a barcode on the shipping container that identifies the contents. The barcode can be scanned by the customer to record the receipt of the order.
6. Shipment and inspection of shipment of goods. Most goods are delivered to customers by regular carriers, such as independent automobile lines, railways, or air carriers. The shipper prepares a bill of lading, which describes the parcels to be delivered to the customer by an ordinary carrier, delivery conditions, and delivery address. A bill of lading is an official legal document that imposes responsibility on the shipper. A representative of the common carrier signs a bill of lading confirming receipt of the goods. The delivery department confirms the shipment by completing the packing list and returning it to the billing department, electronic recording of everything sent and transmission of delivery information to the billing department, or preparation of independent shipping documents, a copy of which is sent to the billing department.
7. Preparation and dispatch of the invoice. Invoices are usually drawn up after receiving notification that the goods have been shipped. The invoice must include items such as terms of sale, payment terms, and prices for shipped goods. The invoice will serve as an important document in terms of audit evidence.
8. Send monthly reports to customers. Many organizations prepare monthly reports on open products and send these reports to customers by mail. The monthly report contains a detailed list of the client's actions for the previous month and a report on all open positions.
9. Receiving payments. Proper accounting of all income receipts is crucial for the final valuation of both cash and receivables. This part of the revenue process is usually considered as part of the cycle of monetary transactions.
Discussion. This method is widely used in international standards of accounting. However, the national accounting standards of some countries differ from this method and try to integrate with this one. As an example, Uzbekistan's national accounting standards are being replaced step by step with international standards. This improvement will result in improvement in increasing foreign investments.
Conclusion. Sales information is used to make strategic long-term decisions and marketing analyses. Therefore, the accuracy of accounting for transactions in the revenue cycle is important for making management decisions, as well as for preparing financial statements.
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