A useful document(s) that an auditor will review in auditing the valuation of accounts receivables

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A useful document(s) that an auditor will review in auditing the valuation of accounts receivables.

a. Matching sales invoices with shipping reports and customer purchase orders.

b. Confirmation of account balance directly with the customer.

c. Aged trial balance of customer account balances.

d. Customer pre-qualification credit reports.

 

A strong substantive audit procedure to test the existence/occurrence assumption in the revenue cycle:

a. Ascertaining that there is credit check documentation on file for customers with significant sales transactions.

b. Selecting transactions from the sales register and vouching to the invoice, shipping documentation and the customer purchase order.

c. Inquire of management as to the collectability of large account receivable balances.

d. Tracing large customer receivable balances at period end to subsequent collection in a later period.