An auditor can use several procedures to test accounts receivable in the sales and collection cycle: Verifying individual transactions Auditors can send confirmation letters to customers to verify the balance is correct. They can also select sales transactions from the sales ledger and verify that there are legitimate sales receipts. Analyzing customer orders Auditors can compare invoices sent to customer orders to ensure they match. Assessing internal controls Auditors can evaluate the effectiveness of the company's internal controls related to accounts receivable. This includes... Show more An auditor can use several procedures to test accounts receivable in the sales and collection cycle: Verifying individual transactions Auditors can send confirmation letters to customers to verify the balance is correct. They can also select sales transactions from the sales ledger and verify that there are legitimate sales receipts. Analyzing customer orders Auditors can compare invoices sent to customer orders to ensure they match. Assessing internal controls Auditors can evaluate the effectiveness of the company's internal controls related to accounts receivable. This includes authorization of credit, approval of sales transactions, recording and reporting of receivables, and collection procedures. Other procedures include: Inspecting customer orders Comparing receivable reports with the grand total Matching invoices to shipping log Confirming receivables Reviewing cash receipts Reviewing credit notes Trend analysis Related Test: Auditing & Assurance 101 Practice Test: Audit of the Sales and Collection Cycle - Tests of Controls and Substantive Tests of Transactions Show less
An auditor can use several procedures to test accounts receivable in the sales and collection cycle: Verifying individual transactions Auditors can send confirmation letters to customers to verify the balance is correct. They can also select sales transactions from the sales ledger and verify that there are legitimate sales receipts. Analyzing customer orders Auditors can compare invoices sent to customer orders to ensure they match. Assessing internal controls
Auditors can evaluate the effectiveness of the company's internal controls related to accounts receivable. This includes authorization of credit, approval of sales transactions, recording and reporting of receivables, and collection procedures.
Other procedures include: Inspecting customer orders Comparing receivable reports with the grand total Matching invoices to shipping log Confirming receivables Reviewing cash receipts Reviewing credit notes Trend analysis
Related Test: Auditing & Assurance 101 Practice Test: Audit of the Sales and Collection Cycle - Tests of Controls and Substantive Tests of Transactions
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