AUDIT PROGRAM FOR ACCOUNTS RECEIVABLE

Risks
 The accounts receivable listing or individual balances may be inaccurate
 Accounts receivable balances may not exist
 Accounts receivable may not be collectible
 Bad debts write-offs may not be valid
 Sales transactions may be processed in the wrong period

Steps
1. Agree a detailed listing of accounts receivable to the summary

Obtain a detailed listing of accounts receivable balances (aged by customer, if possible) and:

a) trace totals to the comparative summary of accounts receivable balances;

b) select reconciling items in order to obtain a moderate to low level of assurance that accuracy is achieved and
i) trace these items to supporting documentation; and ii) determine whether the results of the client's investigations have been reviewed and approved by a responsible official;

c) test, to an extent to obtain a moderate to low level of assurance, the mathematical accuracy of the detailed listing; and

d) if appropriate, examine support for any significant adjustments made throughout the year in reconciling detailed accounts receivable records with the account(s) in the general ledger.

2. Positively confirm selected accounts receivable balances

Select customers' account from the detail accounts receivable listing for positive confirmation in order to obtain a moderate to low level of assurance that the aforementioned audit objectives are achieved. Perform the following:

a) send positive confirmation requests under our control. Where appropriate, send itemized statements to customers to facilitate responses. Second requests and, where warranted, third requests should be mailed when responses to positive confirmation requests have not been received within a reasonable time. When management requests us not to confirm certain accounts receivable balances, consider whether