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Accounts Receivable Program
Accounts Receivable Program
Receivable
Company Balance Sheet Date
The company has the following general ledger accounts that are classified in the accounts, notes,
or other receivables captions of the balance sheet:
General
Ledger Description or Brief Purpose Current or
Number of the Account Noncurrent Asset?
AUDIT OBJECTIVES
BASIC PROCEDURES
a. Compare sales for the last month of the fiscal year to sales
for the rest of the year and the first month after year end.
When there has been a large increase in sales during the last
month of the year under audit or in the first month of the new year.
Year-end cutoff.
Write-offs.
Imputed interest.
Transfers of receivables.
Cash receipts.
Year-end Cutoff
b. Review the journal for sales returns and credit memos for
two months before and after year end. Investigate any unusual
entries.
When there has been a large increase in sales during the last
month of the year under audit or in the first month of the new year.
Write-offs
C Select individual accounts that were written off during the audit
period. Determine that the entries were properly approved by the
owner/manager. Document the items tested.
Practical Consideration:
Imputed Interest
Analytical Procedures
The companys total assets are less than $100 million on the
date of the financial statements.
SFAS No. 107 does not require that fair values of financial
instruments be estimated if it is not practicable, or cost effective, to
develop the estimates. The decision of whether it is practicable
should consider such things as the importance of the financial
instrument to the clients business activities and the materiality of
the carrying amount of the financial instrument to the financial
statements.
Transfers of Receivables
Cash Receipts
b. The total amounts on the daily cash receipts list and daily
deposit slips agree.
Practical Considerations: