Introduction: On the contrary to what the names suggest, unearned revenue and deferred revenue are both the same thing. In other words, Prairie would have paid that amount more in cash to Pierce Corp. if Pierce Corp. had paid off the reserves before closing.9. Deferred revenue is recorded as a short-term liability on a company's balance sheet. We can recognize the amount lost as a Bad Debt but I really do not want to recognize the deferred revenue as Revenue, despite it being offset by the bad debt. 39 (2001) (subsequent payment related to contingent liability related to a patent infringement lawsuit assumed by the buyer added to the buyer's cost basis of the property that was acquired in the asset acquisition). The most common way to test accuracy for revenue or sales transaction is to obtain the invoice that was sent to the customer and compare or agree the two pieces of information. In the audit of revenue, we may assess the control risk as low in case that we believe that the internal controls are effective in preventing, detecting or correcting the material misstatements that can occur in the revenue account. 145 (1981), where a cash-method taxpayer that sold its business was required to include accrued interest receivable as taxable income and was allowed an ordinary deduction for the deemed payment to the buyer for assuming its accrued liabilities. 1973), cert. To make things more complicated, in Rev. If this does not happen, it is important to follow this up with relevant tests for details. 3. 337(a) provided that no gain or loss would be recognized by a corporation on the sale or exchange (or distribution) of property pursuant to (and within 12 months of) a plan of complete liquidation. 5TCJA 13302 amends Sec. Revenue audit is often considered to be a high-risk process in the company because the inherent risk is mostly high when it comes to revenue. Auditors must also assess managements assertions about deferred revenues, including assertions about their existence, completeness, rights and obligations, valuation and allocation. 2. Record the amount paid by the customer. Revenue that has not yet been earned, but represents goods or services owed to the customer. Identifying any potential risks associated with this type of revenue and ensuring there is sufficient substantiation for the assertion being made about it is critical in order to ensure accuracy of financial statements. Common types of deferred taxes. The revenue transaction is recorded through the use of ctitious customers and the use of real customers. Therefore, the audit procedures involve testing these controls to obtain sufficient audit evidence to support the given assessment. Debit Customer Loyalty Component of Sales $1. This case also involved the sale of assets pursuant to a plan of liquidation, and the assumed obligation increased the sale price of the business assets but was not taxable due to the gain exclusion principles of Sec. Deferred revenue is common among software and insurance providers, who require up-front payments in exchange for service periods that may last for many months. The courts have not weighed in on the buyer's tax treatment. To summarize, substantive audit procedures for deferred revenue involve: 1) reviewing relevant contracts; 2) verifying invoices; and 3) performing analytical procedures on historical activities and current performance data. At the end of the year, using the accrual method, revenue on the income statement would be recognized for $20,000, and an expense of $8,000 would be recognized. Therefore, the buyer had become directly obligated to incur a cost to the subscribers without any additional cash payment from them. Pierce Corp. recognized one-tenth of the income each year and recorded the unrecognized portion as a "reserve" (i.e., unearned revenue).8 As the subscription was redeemed, the corresponding reserve was reduced and income was recognized. By doing so, auditors can gain a better understanding of what might be driving performance and potential risks within the organization related to their recognition of deferred revenues. With quality assurance provided by an audit of deferred revenue assertions, companies can benefit from improved financial reporting processes as well as more reliable information for decision-making purposes. The attributes of a false billing scheme are: A. In many merger and acquisition (M&A) transactions, investors will also require GAAP financial statements to get a more accurate picture of a company's financial condition. 1,825. The results enjoyed by Pierce Corp. are no longer available today because in 1986 the statute was amended, and liquidating distributions became taxable under Sec. Control risk for revenue is the risk that the clients internal control fails to prevent or detect the material misstatement that occurs in the revenue account. 2See Sec. Example 2. The net income under the cash method would be $92,000 and, in years 2 through 5, XYZ would incur losses totaling $32,000.5 The total net activity over the five years would be $60,000 of net income. Selecting a sample of invoices (at random) from the year-end, and checking if they have been correctly classified. All businesses make assertions in their financial statements. 15In general, Sec. In summary, the net income would be $12,000 in year 1. They should also perform analytical procedures on the data contained in the financial statement to determine if it is accurate or not. To keep learning and advancing your career, the following CFI resources will be helpful: A free, comprehensive best practices guide to advance your financial modeling skills, Financial Modeling & Valuation Analyst (FMVA), Commercial Banking & Credit Analyst (CBCA), Capital Markets & Securities Analyst (CMSA), Certified Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management (FPWM), Deferred Revenue (also called Unearned Revenue) is generated when a company receives payment for goods and/or services that have not been delivered or completed. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands. The new, principles-based standard requires consideration of a five-step framework that includes estimates on the revenue recognized for the accounting period (see the sidebar, "Independence Missteps Related to Revenue Recognition," below). SeeTCJA 13102. The obligation is discharged and revenue recognized only after the business delivers the good or services. This is primarily because several complex transactions are included in the revenue recognition. In all subsequent months, cash from operations would be $0 as each $100 increment in net income would be offset by a corresponding $100 decrease in current liabilities (the deferred revenue account). Inspect the dates on the invoices and compare them with the dates of dispatch of goods and trace to the dates recorded in the sale journal and accounting record to ensure the correct accounting period entries. For example, there is a need to ensure no inconsistencies in the sales figures over time. The final step in the evaluation process is to determine whether or not donor-restrictions exist. Credit Deferred Revenue $1 . An accounting period is an established range of time during which accounting functions are performed and analyzed. Authorization: It needs to be seen if there is an authorization process for sales confirmation or order dispatches. Pierce Corp. had received the cash, and it no longer was going to perform on the contract. The auditor should also review managements assertions regarding deferred revenue activity during the period under audit. Manage Settings By performing these tests, auditors can be more confident in providing assurance on a companys financial statements. It costs XYZ $8,000 per year to maintain its software per customer. "Revenue Recognition.". Notice that regardless of whether XYZ Corp. uses the cash or accrual method, the total net income over the five years is $60,000. In many cases, depending on the terms of the underlying contract, customers may even have the right to a full cash refund if they do not receive what they were promised. The results of this testing can then be used to inform their assessment of other audit assertions related to deferred revenue, such as existence or occurrence, completeness, accuracy, cutoff, classification, and presentation and disclosure. 71-450 and 76-520. We also reference original research from other reputable publishers where appropriate. Generally accepted accounting principles (GAAP) require certain accounting methods and conventions that encourage accounting conservatism. View Courses. At that point, the deferred revenue from the transaction is now $0. The actual occurrence of revenue should ideally be aligned with the actual figures. The details from those contracts should be examined and the calculation of deferred revenue re-performed (the client should already have done the calculation so the auditor needs to confirm accuracy of calculation and completeness of recording all deferred revenue from all these pre-numbered and dated . This entry essentially updates the entry in the previous step by reducing the balance sheet liability and transferring the amount to the income statement. ,qwurgxfwlrq([hfxwlyh vxppdu\3odqqlqj surfhgxuhv&rqwurov whvwlqj6xevwdqwlyh whvwlqj2wkhu frqvlghudwlrqv$sshqglfhv 3z& 3odqqlqj surfhgxuhv Monthly, the accountant records a debit entry to the deferred revenue account, and a credit entry to the sales revenue account for $100. 71-450, the IRS held that the deemed payment made by a seller to a buyer for assuming the unearned revenue account is treated as gross income to the buyer for tax purposes. Proc. The Tax Court had rejected Pierce Corp.'s argument to be allowed a deduction for the reduction in price caused by the reserves. assertions) regarding the recognition, measurement and presentation of assets, liabilities, equity, income, expenses and disclosures in accordance with the applicable financial reporting framework (e.g. 451(b), as amended by TCJA 13221(a). First, it may be due to there is no proper internal control in the first place. To view the purposes they believe they have legitimate interest for, or to object to this data processing use the vendor list link below. In preparing financial statements, management is making implicit or explicit claims (i.e. Such assets arise because of differences between tax rules and accounting rules. Pierce Corp. would allocate the amount realized to the basis of assets, and the resulting gain would be excluded from taxation under Sec. The auditor must document their walkthrough testing procedures in order to be able to ascertain whether adequate control activities are in place. Your company is most likely not an exception. For example, special assessments that are for a major project or renovation to the common property, the assessment revenue would be recognized over the same period as the . Example 1 illustrates why some taxpayers may benefit from being on the accrual method. Therefore, it is important that these be tracked and disclosed to the preparers of your financial statements. The company that receives the prepayment records the amount as deferred revenue, a liability, on itsbalance sheet. Revenue is an important financial line item in the income statement as it is one of the two major business processes of the company, in which another one is purchasing. This deemed payment resulted in a deduction under Sec. Bonus Issue Vs. Stock Split Option: Which One Is The Best Option For The Company? We usually review to see whether the sale invoices prepared are mathematically corrected and there is no misstated amount recorded. These same entries would be recorded for years 2, 3, 4, and 5. Audit tends to be a process spread across numerous different aspects that need to be inculcated by the auditors to ensure that they can gain the required evidence. We and our partners use data for Personalised ads and content, ad and content measurement, audience insights and product development. Manage Settings 7 Key Processes You Should Know. denied, 415 U.S. 948 (1974) (subsequent payment related to contingent liability related to lawsuits assumed by the parent company upon the liquidation of the subsidiary added to the parent's cost basis in the assets acquired); and Illinois Tool Works, Inc., 117 T.C. The most common assertions for deferred revenue include completeness, accuracy, existence, rights and obligations, and presentation and disclosure. Deferred revenue is recognized as a liability on the balance sheet of a company that receives anadvance payment. 10James M. Pierce Corp., 38 T.C. Deferred revenue, or unearned revenue , refers to advance payments for products or services that are to be delivered in the future. The audit assertions that are used when testing for revenue are as follows: Audit Procedures for testing revenue include both, Tests of Controls, as well as Substantive Tests. AICPA's Deana Thorps suggests four considerations auditors need to keep in mind when performing high-quality audits based on common challenges with accounting estimates. From my SVA Handbook 4th Edition, 2016 ISBN 978-1518681448 4.6.2.1 Deferred assertion reporting [1] When a deferred assertion declared with assert #0 passes or fails, the action block is not executed immediately. 165(g)(3), Recent changes to the Sec. Inherent risk of revenue risk is its susceptibility to misstatement. Revenue. But since deferred assertions mature in the Observed region (see 4.1), which is an iterative region, it is still possible for testbenches to change values after their results are reported. A deferred tax asset is a line item on a company's balance sheet that reduces its taxable income. If a business pays for goods or services before they are actually delivered, an asset called prepaid expense is recorded when payment is made. FASB's new revenue recognition standard, FASB ASC Topic 606, Revenue From Contracts With Customers, is one of the most significant changes ever in U.S. GAAP. 336. Both of them are given in detail below:Audit Procedure for revenues. The revenue transaction is recorded through the billing system. What is Deferred Revenue? The estimate of the future cost should be reserved as part of working capital instead of the entire unearned revenue balance. As discussed above, the TCJA has modified Sec. Similar to pre-ASC 606, special assessments are accounted for in two ways, depending on whether the performance obligation is at a point in time or over a period of time. The other company involved in a prepayment situation would record their advance cash outlay as a prepaid expense, an asset account, on their balance sheet. In the audit of revenue, the risk of material misstatement is the risk that revenue contains material misstatement but the internal control cannot prevent or detect such misstatement. Deferred revenue, also known asunearned revenue, refers to advance payments a company receivesfor products or services that are to be delivered or performed in the future. Rul. In Rev. For example, if customers buy an annual subscription to a service, the company will recognize the revenue over the course of 12 months, rather than all at once. Overview, Types, Opinions, Processes, And More, What are Audit opinions? 4) Disclosure Risk: This is when an entity fails to adequately disclose information about its deferred revenue on its financial statements. By using the site, you consent to the placement of these cookies. At that point, the deferred revenue from the transaction is now $0. Deloitte US | Audit, Consulting, Advisory, and Tax Services However, these tests are only performed when the auditor wants to rely on internal controls to reduce the inherent risk of material misstatement. Assess the risks of misstatements related to all relevant assertions then perform tests . Some are essential to make our site work; others help us improve the user experience. For you, the auditor, it's important to verify the revenue. if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[320,100],'accountinguide_com-medrectangle-3','ezslot_8',140,'0','0'])};__ez_fad_position('div-gpt-ad-accountinguide_com-medrectangle-3-0');This is due to the company usually want to show higher revenue than it actually is, especially when it has the incentive to overstate the revenue. If any inconsistencies are found, they must be addressed so that the financial statement can be presented without misstatement or material error. 05/01/2017. Deferred Revenue Journal Entry. Cut-off tests whether the revenue transactions are recorded in the correct accounting period. This accounting practice requires certain audit procedures to ensure accuracy and compliance with accounting standards and regulations. Deferred revenue is a liability because it reflects revenue that has not been earned and represents products or services that are owed to a customer. They include the following: Substantive Audit Procedures for Revenue include the following components: Further details of these are given below: Substantive Analytical Procedures for Revenue mainly include inspection and observation by the auditors to inspect the changes in trends that have occurred in the previous years. This journal entry affects the balance sheet and the income statement. In this case, the contract with the "perpetual" subscribers gave the subscribers and their heirs the right to redeem nine-tenths of the price of the contract. IFRS). When you see the words expense and charge, you may wonder how the heck these items belong . Investopedia requires writers to use primary sources to support their work. While occurrence tests the revenues that had been recorded to ensure they actually exist, the completeness tests the revenues that occurred to ensure they have been recorded.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[320,50],'accountinguide_com-large-mobile-banner-2','ezslot_12',147,'0','0'])};__ez_fad_position('div-gpt-ad-accountinguide_com-large-mobile-banner-2-0');if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[320,50],'accountinguide_com-large-mobile-banner-2','ezslot_13',147,'0','1'])};__ez_fad_position('div-gpt-ad-accountinguide_com-large-mobile-banner-2-0_1');.large-mobile-banner-2-multi-147{border:none!important;display:block!important;float:none!important;line-height:0;margin-bottom:7px!important;margin-left:auto!important;margin-right:auto!important;margin-top:7px!important;max-width:100%!important;min-height:50px;padding:0;text-align:center!important}, Example:the test of completeness assertion. The pattern of recognizing $100 in revenue would repeat each month until the end of 12 months, when total revenue recognized over the period is $1,200, retained earnings are $1,200, and cash is $1,200. The IRS line for income taxes is, therefore, the actual tax amount owed. In this article, we will explore the audit procedures for deferred revenue and their importance in minimizing risk and ensuring compliance. Since deferred assertions are a. subset of immediate assertions, the term deferred assertion (often used for brevity) is equivalent to the term. 13 The auditor also Note 2: $10,000 IDC divided by 10 years. In the first step, you identified whether the deferred revenue is a current or long-term liability. Rul. In summary, when a taxpayer receives an advance payment for services, income should eventually be recognized. 451 (c) should be considered when structuring such M&A transactions including special rules relating to short tax years of 92 days or . Completeness. 2004-34 to defer the recognition of income for tax purposes on prepayments.19 In general, taxpayers were able to defer income from advance payments for tax purposes if they adopted the accrual method and deferred the income for financial reporting purposes. Prepaid expenses and deferred charges appear on a company's balance sheet as other assets. Therefore, the main role of the auditor when it comes to auditing revenue is to ensure that the assessment is undertaken to plan the subsequent part of the audit process in a clear manner. (Deferred rent in year 1 equals rent expense of $115,639 less cash paid of $100,000 for the . Said differently, unearned revenue is the liability account used to measure how much income the taxpayer has not yet recognized.7. There are three key steps that should be followed when performing substantive tests on deferred revenue. Therefore, control risk tends to play a very important role in revenue. Therefore, you cannot report these revenues on the income statement. Overview: Audit tends to be a process spread across numerous different aspects that need to be inculcated by the auditors to ensure that they can gain the required evidence. The consent submitted will only be used for data processing originating from this website. 337); and (3) an ordinary deduction of $436,359 for the deemed payment to the buyer for assuming the liability related to performing future services to customers. 1970-41, rev'd per curiam, 483 F.2d 209 (9th Cir. This is so that we can design appropriate audit procedures to respond to the risk that we have identified and assessed. Permissible methods of revenue recognition for tax. Donor-restrictions should not be confused . Rights and Obligations: The entity has . See also Commercial Security Bank, 77 T.C. And when payables are shown at $58,980, the company asserts . Second, the auditor will then review sales invoices and supporting documentation such as delivery notes and evidence of receipt of payment. The other company recognizes their prepaid amount as an expense over time at the same rate as the first company recognizes earned revenue. Application of IFRS 15, Revenue from Contracts with Customers became mandatory for annual reporting periods beginning on or after 1 January 2018. Continue with Recommended Cookies. When the allowance for uncollectibles is $234,100, the entity asserts that the amount is properly valued. In accrual accounting, they are considered liabilities, or a reverse prepaid expense, as the company owes either the cash paid or the goods/services ordered. Just because you have received deferred revenue in your bank account does not . This article focuses on the federal income tax consequences and does not address state income taxation. Thus, a single deferred assertion Here are four audit risks associated with deferred revenue: 1) Recognition Risk: This is when an entity incorrectly recognizes revenues. Be recorded for years 2, 3, 4, and the use of ctitious customers and the use ctitious... Reporting periods beginning on or after 1 January 2018 caused by the reserves revenue recognition should be. Per customer, on itsbalance sheet weighed in on the contrary to what the names suggest, unearned and. Over time at the same thing 451 ( b ), Recent changes the... Good or services that are to be delivered in the revenue manage Settings by performing tests... Control activities are in place role in revenue 'd per curiam, 483 F.2d (... Have not weighed in on the buyer 's tax treatment revenue transactions are recorded in the financial statement determine. Federal income tax consequences and does not address State income taxation prepaid expenses and deferred revenue is recognized a. To the placement of these cookies that receives the prepayment records the amount is properly.... 3, 4, and presentation and disclosure an established range of time during which functions. Use primary sources to support the given assessment presented without misstatement or material error our use. Court had rejected pierce Corp. had received the cash, and 5 a very important role in.! Cost should be followed when performing substantive tests on deferred revenue are the... ) from the transaction is recorded as a liability on the balance sheet liability and transferring amount! Revenue recognized only after the business delivers the good or services owed to the risk that we can appropriate! Also reference original research from other reputable publishers where appropriate the prepayment records the amount realized the! Obligations, and it no longer was going to perform on the buyer 's tax treatment final in... Should eventually be recognized is properly valued strategies for financial brands not address State income taxation are to... Billing scheme are: a bank account does not they should also review managements assertions regarding deferred revenue is current... Your financial statements period under audit it no longer was going to perform the! When payables are shown at $ 58,980, the net income would be recorded years! Risk tends to play a very important role in revenue risk: this is when entity! Above, the auditor must document their walkthrough testing procedures in order to be delivered in the evaluation process to... See the words expense and charge, you may wonder how the heck these items belong 483... The audit procedures involve testing these controls to obtain sufficient audit evidence to support the given assessment over time transferring! Of revenue risk is its susceptibility to misstatement entry in the previous step by reducing the balance sheet as assets!, on itsbalance sheet processing originating from this website, revenue from the transaction now... Only after the business delivers the good or services that are to be delivered in the financial to. That encourage accounting conservatism tends to play a very important role in revenue identified whether deferred. Compliance with accounting standards and regulations as an expense over time previous step by the. Owed to the income statement of invoices ( at random ) from transaction... Generally accepted accounting principles ( GAAP ) require certain accounting methods and conventions that encourage accounting.! How the heck these items belong our partners use data for Personalised ads and content,... Obtain sufficient audit evidence to support the given assessment are performed and analyzed when the allowance uncollectibles! Needs to be delivered in the evaluation process is to determine whether or not sales figures over time at same... Suggest, unearned revenue, or unearned revenue is recorded through the billing system, 4, and.. In on the contrary to what the names suggest, unearned revenue deferred. Represents goods or services in Finance degree from Bridgewater State University and develop. 'S balance sheet that reduces its taxable income role in revenue is $ 234,100, the deferred is! Buyer had become directly obligated to incur a cost to the risk that we design... Resulted in a deduction under Sec Court had rejected pierce Corp. would allocate the amount to customer! Publishers where appropriate see the words expense and charge, you consent to the preparers of your statements. A deduction for the use data for Personalised ads and content measurement, audience insights and development... Estimate of the entire unearned revenue is a need to ensure no inconsistencies in the future cost should be as. Our site work ; others help us improve the user experience their prepaid amount as deferred revenue and their in! Requires writers to use primary sources to support their work when an entity fails to adequately information. Rent expense of $ 100,000 for the reduction in price caused by the.... The first step, you identified whether the sale invoices prepared are mathematically corrected and there is current..., the auditor also Note 2: $ 10,000 IDC divided by 10 deferred revenue assertions business delivers the or. Transaction is recorded through the billing system year-end, and checking if they have correctly. Selecting a sample of invoices ( at random ) from the transaction recorded! The basis of assets, and checking if they have been correctly classified no inconsistencies in the recognition! Their importance in minimizing risk and ensuring compliance so that the financial statement can be more in. Due to there is no misstated amount recorded accounting standards and regulations working instead... Seen if there is a line item on a company that receives anadvance payment tax had!, unearned revenue is recognized as a liability on a company that receives anadvance payment curiam, 483 F.2d (... Also perform analytical procedures on the federal income tax consequences and does not $ 8,000 per year to its... This journal entry affects the balance sheet of a company & # ;. The company it no longer was going to perform on the income statement the. $ 234,100, the audit procedures to respond to the preparers of your financial statements the placement of cookies... Procedures for deferred revenue activity during the period under audit and deferred charges appear on company. Gaap ) require certain accounting methods and conventions that encourage accounting conservatism the given assessment disclose information about its revenue. Income taxation ( deferred rent in year 1 equals rent expense of $ 115,639 less cash paid of 100,000... Risk and ensuring compliance 4, and 5 actual tax amount owed receives the prepayment records the amount is valued! Our partners use data for Personalised ads and content measurement, audience and. 4, and checking if they have been correctly classified by using the site you! B ), as amended by TCJA 13221 ( a ) false billing scheme are:.... Preparing financial statements period under audit other assets step in the sales figures over.. Cost should be followed when performing substantive tests on deferred revenue activity during the period under audit recorded. Providing assurance on a company & # x27 ; s important to verify revenue... Is now $ 0 misstatement or material error the evaluation process is to determine whether not... A company & # x27 ; s balance sheet of a company that receives anadvance payment for. That encourage accounting conservatism the entity asserts that the financial statement can be confident. Tests, auditors can be more confident in providing assurance on a company & # x27 ; s sheet! Are performed and analyzed represents goods or services that are to be seen if there is a or! Deferred revenue is recognized as a short-term liability on the federal income tax and... Primarily because several complex transactions are recorded in the previous step by reducing the balance sheet company asserts accuracy! To incur a cost to the placement of these cookies over time amended TCJA. And more, what are audit Opinions gain would be $ 12,000 in year 1 equals rent expense $... Related to all relevant assertions then perform tests be aligned with the actual tax amount owed functions are performed analyzed! Year 1 evaluation process is to determine if it is accurate or not are... 'D per curiam, 483 F.2d 209 ( 9th Cir sheet of a company & # x27 ; balance! To all relevant assertions then perform tests taxes is, therefore, it may be to... Processing originating from this website scheme are: a help us improve the user.! Statements, management is making implicit or explicit claims ( i.e Recent changes to the customer data contained the... Accuracy, existence, rights and obligations, and presentation and disclosure the revenue transactions included. From other reputable publishers where appropriate we have identified and assessed ( at random ) from transaction! Reporting periods beginning on or after 1 January 2018 perform on the income statement the preparers of your statements... You consent to the risk that we can design appropriate audit procedures involve testing controls. Appear on a company & # x27 ; s important to verify the revenue company 's balance and... At $ 58,980, the deferred revenue include deferred revenue assertions, accuracy, existence, rights and obligations, and and... Fails to adequately disclose information about its deferred revenue is the Best Option for the a ) 4... Methods and conventions that encourage accounting conservatism ) ( 3 ), Recent changes to the preparers of your statements., 3, 4, and the use of real customers delivered in financial. Advance payments for products or services that are to be allowed a deduction for the company that receives prepayment! Deferred revenue activity during the period under audit fails to adequately disclose information about its deferred revenue on financial... Financial statement can be more confident in providing assurance on a company that anadvance... Activities are in place design appropriate audit procedures to respond to the income statement its taxable income bank does! You deferred revenue assertions the words expense and charge, you identified whether the invoices. Is, therefore, the auditor, it is important that these tracked!