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➢ Significant differences indicate potential cutoff problems in the test of year-end
balances.
6- Posting and summarization:
➢ The auditor should trace the posting from sales journal to subsidiary AR ledger
and sales account.
Third: Design test of Details for accounting receivable Balances
The objectives of auditing the AR balance are:
1) Existence: Recorded accounts receivable exists.
o Confirmation of accounts receivable is the most important test of details of
accounts receivable balance to determine that A/R actually exist
2) Completeness: all Existing accounts receivable are included.
o However, the auditor can trace the shipping documents to the journal entries
and subsidiary ledger.
o Also, by examining the movement of inventory and tracing them to the sales
invoices, he can discover any unrecorded sales and omitted AR
3) Accuracy: Accounts receivable is accurate
oConfirmation of accounts balances selected from trial balance is the most
common test of detail for accuracy.
4) Classification: Accounts receivable is correctly classified
o Auditor must make sure the client correctly classified AR as Current or non-
current & trade or Non trade.
5) Cutoff: Cutoff for accounts receivable is correct
o Cutoff misstatements occur when current period transactions are recorded in the
subsequent periods and vice versa
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جميع الحقوق محفوظة ـ الإعتداء على حق المؤلف بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونية
