Account receivables

I think you are getting too “hung up” about over/understatement. We can say, for example:
There is a greater risk of overstatement rather than understatement of trade receivables because, for example:
– revenue may be inflated
– cash receipts might be stolen
– debts might be bad.
That does not mean to say that there is no risk of understatement. Indeed, receivables could be understand – e.g. if revenue is understated (e.g if goods are despatched but not invoiced).
The process for documenting sales/receivables is:
Goods despatch -> Invoice -> Sales day book -> Ledgers -> financial statements
Remember that there is a sales/debtors ledger and the control a/c in the general ledger. (Revisit FA/F3 if you have to – this is fundamental.)
The main substantive procedure for receivables at the y/e is external confirmation (debtors circularisation). The point is that the sample of balances will be selected from the list of balances extracted from the sales/debtors ledger – BUT it is the balance on the control a/c in the general ledger that will be extracted to the financial statements. THEREFORE it is essential to agree the total of the list of balances to the control a/c ledger balance – if they don’t agree they have to be reconciled (by the client). So the auditor must agree the reconciliation before selecting the balances to circularise (i.e. to confirm the completeness and accuracy of the list of balances).