AP-3: ⇒Audit Program for Accounts Receivable
Company Balance Sheet Date
| | | The company has the following general ledger accounts that are classified in the accounts, notes, or other receivables captions of the | |balance sheet: | | |General | |Description or | | |Ledger | |Brief Purpose | | |Number | |of the Account | | |FINANCIAL STATEMENT ASSERTIONS | | | | |E/O Existence or occurrence. V/A Valuation or allocation. | | | | |C Completeness. P/D Presentation and disclosure. | | | | |R/O Rights and obligations. | | | | |AUDIT OBJECTIVES | | | | | A. Accounts receivable are authentic obligations owed to the company at the balance | | | | |sheet date (assertions E/O, R/O, and V/A). | | | | | B. Accounts receivable include all amounts owed to the company at the balance sheet date| | | | |(assertion C). | | | | | C. The allowance for doubtful accounts is adequate but not excessive. If the direct | | | | |write-off method is used, all significant doubtful accounts have been written off, and the bad | | | | |debt exposure in the remaining accounts is insignificant (assertions V/A and P/D). | | | | | D. Pledged, discounted, or assigned accounts receivable are properly disclosed. Related | | | | |party receivables are properly disclosed (assertions R/O and P/D). | | | | | E. Accounts receivable are appropriately classified in the balance sheet, and required | | | | |disclosures are made (assertion P/D). | | | | |IDENTIFICATION CODES | | | | |The letters preceding each of the above audit objectives, i.e., A, B, etc., serve as | | | | |identification codes. These codes are presented in the left column labeled “Audit Objectives” | | | | |when a procedure accomplishes an objective. If the alpha code appears in a bracket, e.g.,...
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