How will you Audit the revenue expense of rent?

Question

Accepted Answer

Audit revenue expense of rent by verifying lease agreements, rent invoices, and bank statements.

Verify lease agreements to ensure rent amount and terms are accurate
Check rent invoices for proper recording and classification
Reconcile rent payments with bank statements
Ensure rent expense is recognized in the correct period
Consider any related party transactions or potential conflicts of interest

Accepted Answer

I would ask for the Rent Expense Schedule from the Client, check it's calculation. Rent expense usually involves a prepaid component. So I would ensure that I recalculate and compare it with the client's working. I would check the Rental Agreement to ensure that it has not expired, to check the Rent per month mentioned in the agreement, and if there are any clauses for rent increment. I would also check that actual payments for the rent are made, by tracing the payments in the Bank Statements.

That is all I can think of currently. Feel free to add more things to this answer

How will you Audit the revenue expense of rent?

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