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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › creditworthiness of client’s customers
Also ma’am is there another way for the auditors to know the creditworthiness of the customers of the client(apart from aged receivables report and extended post-yr end cash receipts), just so that he can know whether the client’s valuations of trade receivables are overstated or not.
Like can auditor use credit scores of the client’s customers?
Assessing the creditworthiness of customers is management’s responsibility – there should be controls in place to ensure that customers are creditworthy before they are given credit. So credit scores/references should included already in the client’s documentation. Is not for the auditor to independently obtain credit scores/references.