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Hi sir for june 2015 exam question 6(b)(iii), they stated that following
” The engagement partner has agreed to this request and tasked you with identifying alternative procedures to confirm existence and valuation of receivables ”
Does this mean that we only can state procedures to confirm the existence and valuation or can we still state other procedures that verify other assertions as well ?
My textbook included the following procedure as part of the answer.
“Inspect the sales ledger for any credit balances and discuss with management whether these should be reclassified as payables ”
I dont understand this procedure. Could you explain sir ? Can i state this as one of the procedure ?
Only existence and valuation: that’s what the question specified.
A credit balance is not expected on the sales ledger. A customer might have paid twice, for example. If so, we owe the customer money and should recognise that as a creditor.
Okay sir i get it. But why do you say that a credit balance is not expected on the sales ledger ? Isn’t it possible for the retail stores to have paid twice ?
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