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receivable circularisation

This topic has 3 replies, 2 voices, and was last updated 7 years ago by Ken Garrett.

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May 22, 2018 at 8:37 am #453302
xiiaolih
Member
- Topics: 65
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Good day sir,
does the circularisation (confirmation letter) of receivables provide evidence for bad debt and provision of doubtful debt?? If it is, how does it prove?
May 22, 2018 at 12:15 pm #453347
Ken Garrett
Keymaster
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No, it does not. A dishonest debtor who had no intention of paying could reply that all was well just to avoid raising people’s suspicions.
Circularisation provides evidemce about accuracy, existence and ownership.
May 22, 2018 at 12:55 pm #453355
xiiaolih
Member
- Topics: 65
- Replies: 42
Sir, may I knw what testing we need to carry out to provide evidence for bad debt and provision of doubtful debt?
May 22, 2018 at 1:59 pm #453360
Ken Garrett
Keymaster
- Topics: 10
- Replies: 10618
Aged analysis
Receivables days
General information you might have about a customer’s trading oosition
Wait as long as possible to see if tbe debt is paid before the audit report has to be signed.
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