In addition, by verifying the balance owed, the customer proves the accuracy assertion of the financial statements. Review documentation for reconciling items.
Number and dollar amount of confirmations received with no exceptions indicated and the percentage of these to the total confirmations requests. Rights and Accuracy Accounts receivable confirmations can also prove the assertion of rights. Give photocopy to client and request that the difference be reconciled and provide documentation for reconciling items.
Prepare and Mail Confirmation Requests The auditor should observe the following procedures in preparing and mailing confirmation requests: . Care must be taken to ensure that the subsequent collections examined relate to receivables that existed at period-end and not to sales occurring after period-end.
His career includes public company auditing and work with the campus recruiting team for his alma mater. This responsibility is known as recourse.
To verify the valuation assertions, validity, and recording and presentation, auditors also perform tests of the journal entries in accounts receivable and the subsidiary ledgers.
Confirmations of accounts receivable are said to be either negative or positive. When is the confirmation of receivables required? Non-response To Confirmation Requests If a response to a confirmation request is not received within a reasonable period of time—two to three weeks—a second request should be sent.
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