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.
Publication Date: March 2025
Topics Covered
- Financial Statement Irregularities
- Key Financial Ratios and Benchmarks
- 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
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
- Indicate how to distinguish between normal financial reporting practices and warning signs of manipulation
Level
Overview
Instructional Method
Self-Study
NASBA Field of Study
Auditing (1 hour)
Program Prerequisites
None
Advance Preparation
None
Instructor
Kelen Camehl
Kelen is a recognized author and reviewer of CPE courses and has authored over 145 courses (350 CPE credit hours) covering a range of accounting, auditing, financial reporting, regulatory, and ethics topics. His courses are available for purchase from many online CPE providers including the AICPA. Kelen remained involved in CPA exam content development for nearly 10 years and authored more than a thousand multiple choice questions for various sections of the CPA exam. He also serves as an Editorial Advisor for the AICPA’s "Journal of Accountancy".
Kelen has nearly 20 years of progressive finance and accounting experience. He currently serves as an Accounting Policy Advisor with HP. Prior to HP, he served in multiple accounting roles in the oil & gas industry with ConocoPhillips including technical accounting policy, SOX compliance, and internal audit. He also gained public accounting experience with PricewaterhouseCoopers, working with various clients in the energy, electric, power, gas, and utility sectors.