Professional Documents
Culture Documents
Investigations II
Audit of Receivables
Key issues
Introduction to audit of
receivables
Occurrence
Completeness
Accuracy
Cut off
Classification
Tests relating to ownership and
existence
Audit Procedures
Debtors’ circularisation.
Examination of balances and post
balance sheet date settlements
which confirm that the debt did
exist at the balance sheet date.
Good credit control procedures over
receivables ledger eg, agreement of
control accounts, debt recovery
procedures.
Reading correspondence with
debtors.
Tests relating to valuation
Audit Procedures
Audit Procedures
Receivables should be
presented at net realisable
value (ie, net of any allowance
for doubtful debts).
Receivablesmust be presented
“grossed up” (ie, all credit
balances are eliminated and
disclosed under payables
instead).
Continued
A debtors’ circularisation
involves selecting a sample of
receivable balances from the
client’s ledger and, after
obtaining the client’s
permission, writing direct to
the customer (the debtor) in
order to confirm that the
balance is correct.
Additional Procedures