Audit Program for Account Receivable

Florendo, Villegas, Casintahan and Associates

Test of Controls: Account Receivable
December 31, 2015

Audit Procedures

Auditing Procedures - Accounts Receivable

Are accounts receivable valid?
Did sales actually occur?
Do the balances of sales and receivables
contain all transactions for the period?
Reconcile sub ledger to control account for
receivables.
Sales cut off test. Trace shipping documents
immediately prior and just after accounting
period to the accounting records. Focus on
FOB shipping point and FOB destination.
Cash receipts cut off test. Trace daily
remittance of payments to accounts receivable
credits.
Trace shipping documents to sales invoices
and accounting entries to determine if sales
were recorded appropriately.
Account for numerical of numbered
documents.
Does the client company have the right to
collect the receivables?
Track cash receipts to determine if collections

WP
Ref

Done
By

Date

match deposits in the company's bank

accounts.
Examine return policy. Evaluate
expected/actual returns before and after yearend. Evaluate past returns at this time period.
Are receivables valued at GAAP, i.e., net
realizable value?
Perform or evaluate clients aging schedule.
Trace cash receipts early in subsequent period.
Cash receipts in subsequent period provide
best evidence of collectibles.
Evaluate delinquent customers credit
histories.
Are sales and receivables appropriately
presented and is their appropriate note
disclosure?