Final answer:
To determine if sales were made without an established credit limit, import the data into IDEA, then filter for records with blank or zero credit limits. Identified exceptions require further analysis, including reviewing sale terms, payment history, and distributor creditworthiness to assess the risks such as potential bad debts.
Step-by-step explanation:
To analyze the sales revenue file using IDEA and determine whether any sales were made to distributors without an established credit limit, you would perform specific steps within the software. Start by importing the sales revenue data into IDEA. Next, you could use the 'Direct Extraction' or 'Criteria' functions to isolate records where the credit limit field may be blank or zero, indicating no established credit limit.
After identifying these exceptions, further testing might include reviewing the terms of sale for each transaction, verifying if subsequent payments were made, checking communication with the distributor regarding credit approval, or analyzing the creditworthiness of these distributors. If these exceptions are significant, you may need to assess their impact on the revenue recognition process and internal controls.
Performing these additional tests will help in determining if these sales pose a risk to the company, such as potential bad debts or non-compliance with company policies on credit sales.