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Sir, what do Post year end cash receipt testing means to assess valuation since customers are struggling to pay their outstanding balances to entity and overstament if receivables due to bad debt not written off.
Also, inspect after date cash receipts from customers to see if paid post year end proving the debt is appropriately valued?
Exam kit from Kaplan ! I do not understand the audit responses to the Audit risked assessed !
Thanks
The question is what will be the audit risk& response in a situation where where customers are struggling to pay their outstanding balances ?
Kaplan answer: The Audit risk is overstatement of receivables if receivables is not written off due to bad debt by client
Audit response : Do post year end cash receipt testing or inspect after date cash receipts from customers to see if paid post year end proving the debt is appropriately valued.Please, explain what Kaplan answers means.
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