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Topic: Miscellaneous
Number of pages / Number of words: 4 / 894
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However, he biggest flaw with this method is that it only deals with costs. This means that there may not be strong correlation between physical progress and costs incurred. Conceptually, one would want to match revenues when the earnings process is judged to be complete. Since costs don't necessarily mean physical completion, the revenues may not represent actual completion...


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Since costs don't necessarily mean physical completion, the revenues may not represent actual completion. However, this method does match all revenues with appropriate expenses. The audit risks associated with this method is that cost incurrence could be accelerated to increase the estimate of the percentage completed...


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