The following are common tests of details of balances or substantive analytical procedures for the audit of
Question:
The following are common tests of details of balances or substantive analytical procedures for the audit of accounts receivable:
1. | Select 10 customer accounts from the accounts receivable master file and trace to the aged accounts receivable listing to verify name and amount. |
2. | Select 10 customer accounts from the aged accounts receivable listing and trace to the accounts receivable master file for name, amount, and aging categories. |
3. | Obtain a list of aged accounts receivable, foot and cross-foot the list, and trace the total to the general ledger. |
4. | Compute accounts receivable turnover for the current year and compare to the prior year. |
5. | Perform alternative procedures on accounts not responding to second requests by examining subsequent cash receipts documentation and shipping reports or sales invoices. |
6. | Request 30 positive and 50 negative confirmations of accounts receivable. |
the icon to view the test of details of balances and substantive analytical procedures.)
Requirements
a. | For each audit procedure, identify the balance-related audit objective or objectives it partially or fully satisfies. |
b. | In which order would the auditor perform the six procedures? Briefly justify your answer. |
Auditing A Risk Based Approach to Conducting a Quality Audit
ISBN: 978-1305080577
10th edition
Authors: Karla Johnstone, Audrey Gramling, Larry E. Rittenberg