“Client Name”

Internal Control Framework

Accounts Receivable
“Date”

Accounts Receivable: Comments *

Are accounts receivable records maintained by an
individual who does not have access to the following:
 General ledger Yes No
 Billing
 Cash remittance records
Are procedures in place to ensure entries to the accounts
receivable sub-ledger are timely and based only upon Yes No
verified customer billing records or remittances?
Is the accounts receivable sub-ledger reconciled to the
general ledger monthly and any variances appropriately
Yes No
resolved? Is the reconciliation reviewed and approved at
the supervisory level?
Is the accounts receivable aging periodically reviewed to
Yes No
identify any unusual or seriously delinquent items?
Do procedures exist to ensure any adjustments to the
receivable balances (credit memos, write-offs, debit Yes No
memos) are properly approved and documented?
Are procedures in place to ensure the accounts receivable
activity and balances are accurately reported to Yes No
management on a periodic basis?
Do procedures and methodologies exist to ensure an
adequate reserve is established for outstanding
Yes No
receivables? Is the reserve periodically reviewed for
reasonableness?

* For a “No” answer, cross-reference to either a compensating control or to audit work which has been performed or is to be performed.

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 “Client Name”
Internal Control Framework
Accounts Receivable
“Date”

Is physical access to accounts receivable records

adequately restricted to prevent loss, destruction, or Yes No
unauthorized use?

Cash Application:
Is the control and responsibility for receiving and
depositing cash assigned to an individual who is
independent of the following functions:
Recording to the accounts receivable sub-ledger
Recording to the general ledger Yes No
Collecting receivables
Authorizing bad debt write-offs
Authorizing credit memos
Preparing billing documents
Are “lockbox” arrangements established with banks
whereby payments are remitted directly to depository
Yes No
accounts? Are customers encouraged to remit payments
to the “lockbox” accounts?
Do procedures exist to ensure customer remittances are
posted to the account receivable sub-ledger records in a Yes No
timely manner?
Unless otherwise directed by the customer, are payments
Yes No
posted to specific invoices?
Are non-lockbox receipts restrictively endorsed upon
Yes No
receipt?

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 “Client Name”
Internal Control Framework
Accounts Receivable
“Date”

Do procedures exist to ensure non-lockbox receipts are

Yes No
logged and deposited into the bank in a timely manner?
Are non-lockbox receipts posted to the accounts
receivable sub-ledger or general ledger by someone other Yes No
than the individual receiving the payment?
Do procedures exist for monitoring and resolving checks
Yes No
returned for insufficient funds?

Reviewed by:
Date:

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