Why a four year long term contract provide significant audit

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Problem 1: Which of the following best illustrates why a four year Long Term Contract provide a significant audit challenge for auditors?

1) Because profit is estimated at each year end dependent on the overall final forecast

2) Because revenue will not be received in the year in which it is recognised

3) Because of uncertainty over the going concern position for suppliers and customers

4) Because no profit will be recognised until the end of the contract

Reference no: EM132959007

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