Identifying Audit Risks - Financial Reporting and Revenue Recognition (Course Id 2501)

• Who is this course for?
  This course is intended for anyone needing Continuing Professional Education (CPE), particularly CPAs, accountants, and auditors involved in financial statement auditing.

• What is this course about or what problem does this course solve?
  The course addresses how to identify red flags in financial reporting and revenue recognition, helping auditors detect irregularities and potential fraud during audits.

• How can the knowledge from this course be used?
  Participants can apply the course knowledge to recognize unusual financial patterns, assess revenue recognition practices under ASC 606, and distinguish legitimate reporting from signs of manipulation.

• Why is this course important to a CPA, Accountant, or IRS Enrolled Agent?
  This course enhances auditors' ability to detect financial misstatements early, which is critical for maintaining audit quality and integrity in financial reporting.

• When is this course relevant or timely?
  The course is relevant as of its 2025 release and remains timely whenever financial statement audits are conducted, especially under current ASC 606 revenue recognition standards.

• How is a course like this consumed or used?
  It is a NASBA QAS self-study text course, completed independently online, requiring successful completion of review and final exam questions for CPE credit.

This course explores common red flags found in financial reporting and revenue recognition that auditors should watch for during an audit. Key topics include identifying unusual patterns in financial statements, such as irregular revenue or expense recognition, discrepancies in accounts, and indicators of financial manipulation. The course also covers red flags in revenue recognition practices, focusing on the application of ASC 606 and the warning signs that suggest improper revenue reporting. This course emphasizes how auditors can detect financial misstatements early and respond effectively. 

NASBA QAS - Text - NASBA Registry - 2501

Course Learning Objectives

• Identify red flags in financial statements that suggest potential misstatements or fraud
• Recognize common issues in revenue recognition practices that could indicate improper reporting
• Distinguish between normal financial reporting practices and warning signs of manipulation

Chapter 1 - Identifying Audit Risks - Financial Reporting and Revenue Recognition

Course Learning Objectives

Course Overview

Introduction

Financial Statement Irregularities

Key Financial Ratios and Benchmarks

Review Questions

Unusual Accounting Practices

Financial Statement Warning Signs

Using Analytics and Trend Analysis

Revenue Recognition Red Flags

Common Methods of Fraudulent Revenue Recognition

Unusual Patterns in Customer Relationships and Sales

Detecting Improper Revenue Recognition

Conclusion

Review Questions

Glossary of Key Terms