Revenue:

Revenue is the total income earned by the business before the deduction of expense in its normal course of activity by performing the service or selling goods.

Example: Amount received from the sale of goods and services, rent received, commission.

It is added to the capital. It is an inflow of assets and increases the wealth of the organization, that result increases the owners’ equity.

An auditor is hired by the shareholders and board of directors. He is independent from the management and uses his professional knowledge and provides professional service to their client. He is responsible for moral judgment in all his activities done in the course of action.

An auditor can be sued in a court by a client and outsiders who believe he violated the law and suffered harm from the materially misstated financial statement.