Accounts receivable audit program

If balance still proves to be uncollectible, both collection and accounts receivable departments file documentation to indicate actions taken. For example, the representation letter asks about their existence. If approved, sales order goes to finished goods warehouse where goods are gathered and sent to shipping department.

Transactions occurring before the end of year could be recorded in the subsequent period thus, reporting for the initial year is not complete. One copy goes with merchandise and a second copy is sent directly to customer.

Some of these would be errors whereas others would indicate fraud.

Copy of bill of lading [or air way bill] sent to inventory accounting department which should maintain a perpetual listing of all inventory. May be by mail or over telephone or given directly to company employees. Confirm balances directly with customers to prove existence assertion.

Copy of sales invoice is sent to accounts receivable department.

Verify that aged accounts receivable trial balance is added correctly and individual amounts agree with master file. Accounts which have been written off or which have a zero balance can be confirmed just to make certain that reported facts are accurate.

Amount is recorded in accounts receivable master file by customer name. All documents should be compared and cash receipts should be reviewed for subsequent payment.

Vouch one or more entries in the T-account back through system to see if there is adequate support. Amounts were recorded to manipulate reported amount of income.

Credit department reviews credit file which can hold credit report, references, financial statements, payment history of client, etc. Start with customer order and check all steps until account and collection are recorded. Independent party reviews information before final write-off of balance is approved.

Most Common Errors and Frauds In Accounts Receivable and Revenues Here are most common errors and frauds in accounts receivable that potentially result in accounts receivable misstatement: Transaction is with a related party so that disclosure is needed.

Use as a substantive test of an account balance is optional. All confirmations are signed by client but controlled, mailed, and responses received by auditor.Audit Program for Accounts Receivable and Sales for accounts receivable and sales.

Modification to the auditing procedures listed below may be necessary in order to achieve the audit objectives. [Note: Transfer of receivables is not addressed in this audit program, as this type of transaction is not currently engaged in Mongolia.

In auditing accounts receivable and related revenue balances, several potential problems exist that could create material misstatements. Some of these would be errors whereas others would indicate fraud.

A set of basic internal control should be in place to prevent such erroneous or frauds from happening and a serial of substantive test to be. Here are some of the accounts receivable audit procedures that they may follow: Trace receivable report to general ledger. The auditors will ask for a period-end accounts receivable aging report, from which they trace the grand total to the amount in the accounts receivable account in the general ledger.

AUDIT PROGRAM FOR ACCOUNTS RECEIVABLE Risks The accounts receivable listing or individual balances may be inaccurate Accounts. receivable balances may not exist Accounts receivable may not be collectible Bad debts write-offs may not be valid Sales transactions may be processed in the wrong period Steps 1.

Obtain Aged Schedule of Accounts Receivable The auditor should obtain an aged schedule of accounts receivable as of the confirmation date.

He or she should apply the following procedures to this schedule: Determine that totals are correct.

Accounts Receivable Audit

WP # Audit of [Click here and type audit name] Accounts receivable/credit & collections audit program Description Revision Info This program was last reviewed/updated on [Click to Insert Date here]5/5(7).

Accounts receivable audit program
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