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(F8-Audit & Assurance) students,
Below are just a sample of “Substantive Audit Procedures” for Trade Debtors:-
– Have the client prepare a reconciliation of the receivables subsidiary ledger to the general ledger control accounts as of the circularization or balance sheet date. Verify the clerical accuracy of the reconciliation.
– Examine supporting documentation for significant or unusual reconciling items. (Scope/Sample).
– Verify on a test basis the addresses supplied by the client for circularization and cross check them with invoices, correspondence etc.
– Have the client prepare confirmation requests. Obtain requests and prepare confirmation control. Send first requests. Retain copies.- Topics: 0
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Good work man, a better way I understood from London tutor of F8 is that when ever you want to perform substantive test on an assertion, think of what the figure on the FS is impliedly asserting and plan audit test for this.. for example…A/R or debtors account at the year end asserts that, the balance is
1- Accurate—meaning it has been recorded accurately–so audit procedure/test will be, get a sample of sales invoices and trace them back to the FS to ensure if they are accuratly recorded in amount and description wise on the FS.
2- Completeness:- all transactions/balances are recorded completely- no omission at all……Audit test should be, the same as above but now check if they are recorded in the General ledger and the balance on the FS is showing the year end receivable.
2- Valuation:- you can test this by doing analytical procedures, comparing piro year end balance with current balance and spot any usual , if so then investigate why?
and so on and so on
Therefore, if you know what assertions are there, you can easly draw a test on it, use common sense but I know the common sense can be diffuclt if someone lacks the business knowledge and how things go arround.
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