The following are common tests of details of balances for the audit of accounts receivable: 1. Obtain

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The following are common tests of details of balances for the audit of accounts receivable:
1.
Obtain a list of aged accounts receivable, foot the list, and trace the total to the general ledger.
2. Trace 35 accounts to the accounts receivable master file for name, amount, and age categories.
3. Examine and document cash receipts on accounts receivable for 20 days after the engagement date.
4. Request 25 positive and 65 negative confirmations of accounts receivable.
5.
Perform alternative procedures on accounts not responding to second requests by examining subsequent cash receipts documentation and shipping reports or sales invoices.
6. Test the sales cutoff by tracing entries in the sales journal for 15 days before and after the balance sheet date to shipping documents, if available, and/or sales invoices.
7. Determine whether any accounts receivable have been pledged, discounted, sold, assigned, or guaranteed by others.
8. Evaluate the materiality of credit balances in the aged trial balance.

Required
For each audit procedure, identify the balance-related audit objective or objectives it partially or fully satisfies.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For  answer-question

Auditing and Assurance services an integrated approach

ISBN: 978-0132575959

14th Edition

Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley

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