AUDIT PROGRAM FOR ACCOUNTS RECEIVABLE

AUDIT PROGRAM FOR ACCOUNTS RECEIVABLE Risks The accounts receivable listing or individual balances may be inaccurate Accounts receivable balances may not exist Accounts receivable may not be collectible Bad debts write-offs may not be valid Sales transactions may be processed in the wrong period Steps 1. Agree a detailed listing of accounts receivable to the summary Obtain a detailed listing of accounts receivable balances (aged by customer, if possible) and: a) trace totals to the comparative summary of accounts receivable balances; b) select reconciling items in order to obtain a moderate to low level of assurance that accuracy is achieved and i) trace these items to supporting documentation; and ii) determine whether the results of the client's investigations have been reviewed and approved by a responsible official; c) test, to an extent to obtain a moderate to low level of assurance, the mathematical accuracy of the detailed listing; and d) if appropriate, examine support for any significant adjustments made throughout the year in reconciling detailed accounts receivable records with the account(s) in the general ledger. 2. Positively confirm selected accounts receivable balances Select customers' account from the detail accounts receivable listing for positive confirmation in order to obtain a moderate to low level of assurance that the aforementioned audit objectives are achieved. Perform the following: a) ...