1. SAP - AR.BadDebts

1. SAP - AR.BadDebts - AP-2 Substantive Audit...

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Unformatted text preview: AP-2 Substantive Audit Program -Accounts Receivable and Bad Debts Assertions: Begin with the list of assertions below and add others you think appropriate. Then write your audit program to test those assertions. 1. 2. 3. 4. 5. 6. 7. None of the accounts receivable are fictitious. No accounts receivable have been omitted from the balance sheet. The accounts receivable are collectible in the normal course of business. The accounts receivable are bona fide claims owed the company. Pledged accounts receivable or accounts receivable used as collateral are disclosed. Receivables from directors, officers, and affiliates are separately disclosed. Accounts receivable in the aged trial balance agree with related master file amounts, and the total is correctly added and agrees with the general ledger. 8. Accounts receivable are accurate. Program Steps: 1. Existence or Occurrence Confirm accounts receivable using positive confirmation. Follow up on nonresponses, if receivable is unusually large. Review accounts receivables trial balance for large and unusual receivables. Trace accounts receivables master file to the aged trial balance. Inquire of management whether any receivables are pledged or factored. Review receivables listed on the aged trial balance for notes and related party receivables. Foot and cross-foot aging columns. Review the minutes of the board of directors meetings for any indication of pledged or factored accounts receivable. 2. Completeness 3. Rights or obligations 4. Valuation and allocation 5. Presentation and disclosure ...
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This note was uploaded on 05/16/2011 for the course AC 404 taught by Professor Richardkido during the Spring '10 term at Chaminade University.

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