1. Several accounts were incorrectly aged in the
client's aging schedule.
Procedures: Compare age% to prior year AR -Analytical procedures.
Assertion: cutoff, Valuation and allocation.
2. The accounts receivable turnover ratio was far below
expected results.
Procedure: AR analytical test: AR/AP, AR turnover,etc.-Analytical procedures.
Assertion:Completeness, cutoff.
3. Goods billed were not shipped.
Procedure: Cutoff test of billing-test the last month invoices. Vouching to the shipping doc.-Inspection of records.
Assertion: Occurrence, cutoff.
4. Some year-end sales were recorded in the wrong
accounting period.
Procedure: cut off test of billing-test invoices billed subsequent to year end.-Inspection of records
assertion:Completeness, cutoff
5. Several sales were posted for the correct amount but to
the wrong customers in the accounts receivable ledger.
Procedure: Confirmation of billings-Confirmation
Assertion: Occurrence.
6. The allowance for uncollectable accounts was
understated.
Procedures: Test the ratio of allowance to old AR and compare to PY.
-Analytical procedures.
Assertion:Valuation and allocation
7. Several sales were entered and posted at incorrect
amounts.
Procedures: Confirmation of AR. -Confirmation
Assertion: Accuracy and valuation
8. Mathematical errors were made in totaling the accounts
receivable ledger.
Procedures: Foot AR aging.-Recalculation
Assertion: Accuracy and valuation
9. An unrecorded sale at the balance sheet date was
collected in the next month.
Procedure: Post subsequent cash to AR balance at YE. Reperformance. records.
Assertion: Completeness, cutoff.
10. Several fictitious sales were recorded.
Procedure: Confirm customer balance.-Confirmation.
assertion: Occrrence.
11. The pledging of some customer accounts as security for
a loan was not reported in the balance sheet.
Procedure: Review security agreements.-Inspection of record.
Assertion: Occurrence and rights and obligations.
12. Some year-end cash receipts were recorded in the wrong
accounting period.
Procedure: cash cutoff testing.-Inspectionof record.
Assertion: cutoff, occurrence, completeness.
