This module examines the major categories of governmental revenue streams and the unique audit considerations associated with each. Participants will begin by identifying common governmental revenue sources and distinguishing between exchange and nonexchange transactions, with an emphasis on how the nature of each transaction affects financial reporting, revenue recognition, and audit risk assessment.

The module then explores how management’s recognition and classification of revenue can affect related financial statement areas, including receivables, deferred inflows of resources, unearned revenues, and compliance requirements. Through practical scenarios and case-based exercises, participants will evaluate the audit risks and potential findings associated with governmental revenues and related receivables.

Participants will apply professional judgment to assess risks associated with different revenue streams and determine appropriate audit responses. The module concludes with practical application of these concepts as learners design audit responses to address identified risks and obtain sufficient appropriate audit evidence over governmental revenue transactions.