Audit of acc.receivable / acc.payable @ Y/E

1.Opening balances
Agree opening balances to prior year working paper
(Correct b/f, not misstatement,policy consistent)

2. Analytical Procedure
------Sales .review the trend of the sales
.compare the actual sales with budgeted sales
.compute gross profit to ensure all sales are taken up
--Receivable.compute the age of receivable

3.Reconciliation
.Obtain a list of sales ledger balances from the client and check correctness of individually sales ledger balances.Cast listing
.Agree the control account to balances to general ledger
.if the total on control account balances do not agree with the sales leger listing, request client for reconciliation
.audit the reconciliation by checking validity of reconciling item

4. Sales cut off test
.Obtain the last DO number issued for the year
.Take a block of DO before the year end and after the year end to ensure relevant entries have been entered into sales day book & sales ledger in the proper accounting period

5. Sales returns cut off test
.Identify material CN issued after year end , examine the supporting document(such as good inwards notes & determine the reason for the return & were recorded in the correct accounting year end.
6. Cash receipts cut off test
.Obtain the post slip for the last working day of the year to ensure each supported by a validated bank in slip
.Trace the deposit slip to the subsequent period bank statement
.Ensure the receipt were credited to the relevant receivable

7. Unmatched DO
.Review the sales day book in following period to identify the unmatched DO & ensure they are accrued for the year end

8. Debtor confirmation
.ensure balances are correct before preparing the letter
.decide on appropriate method of confirmation(## positive or negative)used for circularisation
.categories the accounts to different group & select the debtor for circularise(large balances,zero balances or credit balances)

9.provision for doubtful debt
.credit limit was exceed
.age of debtor comparison to previous period
.subsequent period payment by debtor in the post balance sheet
.payment history of the history if no payment made in post balance sheet period
.any legal action taken on debtor
.whether the debtor gone into liquidation

## Positive - make sure reply ( Large ind. bal D I E )
1. L arge individual balance
2. D ispute amount & irregularities suspicious
3. I nternal control weak
4. E rrors in book keeping numerous

## Negative - reply if dispute ( A L I )
1. A ttention
2. L arge individual small a/c
3. I nternal control strong