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Ken Garrett.
Ken Garrett.-
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respected sire,
Q; if the key customer is in financial difficulties and would pay on break up basis of 6 months and the finance director is claiming not to create any allowance for this ,as it is a an audit risk
my query is that the auditor response for the allowance is written: to review whether any general allowance for uncollectible accounts is sufficient to cover the amount of this receivable. ( i did not understand what it means please explain me )?
Ken Garrett
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Generally, this would imply that a specific allowance was required. However, if that has not been made, the receivables might still be shown at a fair value if the general provison was large enough to cover that and other, yet to be identified, bad debts.
koushik31
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Sir
Which of the IAS and IFRS I need to know to solve an audit risk question.Ken Garrett
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Just read the relevant notes, listen relevant lectures and do relevant questions. On no account read ISAs or IFRSs.
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