Auditor of Amron Ltd has directed by the audit firm to complete the audit of Bills receivables for the year ending 31" December 2019. 

The manager of the internal control system has informed that a full evaluation of Bills receivable has been performed and all necessary test of control on the accounting records up to 31st December 2019 have been completed by the internal audit team with full satisfaction.

But auditors working papers states that the accounts receivables were unsuccessful because most of the customers are not ready to comment on the clients' accounts receivable balances as requested by the auditor. 

The Amron Recorded 60% of the sales on cash basis and remaining 40% on credit basis. For the year 2019 total sales of the company is OMR 25 million out of this OMR 15 million on cash basis and 10 Million on credit basis. 

The following are the information are extracted from the Auditors working papers about Bills receivables. 

 

Required: 

1. Specify the detailed substantive analytical procedures which you would follow in order to verify the Bills receivable. 

2. List and describe any Two factors to decide the sales data is reliable.

Transcribed Image Text:

No of bills receivables Total amount due Period of due 25 OMR 25,000 3 months Duc 150 OMR 60,000 6 months due 125 OMR 55,000 10 months duc OMR 30,000 More than 12 months 95 No of bills receivables Total amount due Period of due 25 OMR 25,000 3 months Duc 150 OMR 60,000 6 months due 125 OMR 55,000 10 months duc OMR 30,000 More than 12 months 95

Answer rating: 100% (QA)

1 Here square measure a number of the assets substantive analytical procedures that they will follow Trace owed report back to book of account The auditors can invite a periodend assets aging report f... View the full answer