Chapter _10, Accounts Receivable, Cash, etc

Chapter _10, Accounts Receivable, Cash, etc - ACCY360/560:...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ACCY360/560: Assurance Services Primarily Ch #10 and 16 I. Audit of A/R -- primarily rely on substantive tests of ending balances A. Related to existence/occurrence assertion --confirm individual customers' accounts 1. Verify that subsidiary A/R ledger agrees/reconciles with A/R general ledger balance ("underlying accounting records") 2. Confirm all accounts deemed material & selected other accounts on a test- basis 3. Investigate all "exceptions" received 4. If no response received--send 2nd (possibly 3rd) requests; perform "alternate procedures" if still no response received a. Subsequent cash receipts -- trace collections to C/R journal, to b. Vouch to underlying documents -- if not collected, examine B. Related to completeness assertion -- perform "cutoff" test of sales (examine shipping documents a few days before & after year-end and compare with sales invoices) C. Related to valuation assertion -- evaluate reasonableness of management's estimates of "allowance for uncollectibles" & "allowance for sales returns" 1. Review aged trial balance of A/R a. Inquire about any large, delinquent items b. Estimate % uncollectible within each category of age (based on prior 2. Review "receivers" after year-end for sales returns; consider prior year’s returns and current economy 3. Review adjusting journal entries (e.g., writeoffs) for appropriate authorization D. issues --inquire of management 1. About receivables pledged as collateral for debts (review loan agreements to
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 identify security) 2. About shipments on consignment, not really sales E. Note regarding "lapping" to cover up a theft of receipts, clerk might try to apply
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/22/2011 for the course ACCY 360 taught by Professor T during the Spring '08 term at Northern Illinois University.

Page1 / 5

Chapter _10, Accounts Receivable, Cash, etc - ACCY360/560:...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online