Page 37 - eBook Audit Of Financial Statement Components

I
Bank
confirmations
are sent out to
confirm the
bank balance,
overdraft
amounts and
loans
outstanding
with the banks
as at year-end.
Confirmation
3.2 AUDIT OF TRADE RECEIVABLES letters should
be sent directly
by the auditor
and the
You should bear in mind in the audit of receivables that response is to
be received
receivables are a product of the sales cycle and therefore the
directly by the
control objectives of the sales cycle are relevant. auditor to
ensure that
there is no
irregularity
Receivable is a general term that may refer to many types of involved in the
balances
receivables whose origin and nature may be different.
confirmed by
Receivables include amounts due from customers, employees, the banks.

and affiliates on open accounts, notes, and loans and accrued
interest on such balances.

The audit objectives for the receivables and sales relate to obtain

to sufficient competent evidence about each significant financial
statement assertion that pertains receivables and sales

transactions and balances.

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