CLIENTS:

PERIOD
SUBJECT: OTHERS RECEIVABLE

PROCEDURES PERFORMED BY: WORKING PAPER REF.

1.Perform the following analytical procedures for other

receivable and investigate any significant fluctuations or
deviations from the expected balances:

2. Prepare or obtain from the client an aged trial balance of trade

accounts receivable and perform the following:

a. Test the arithmetical accuracy of the aged trial balance and the
aging categories therein.

b. Reconcile the total balance to the general ledger control

account balance.

c. Note and investigate any unusual entries.

d. Summarize the total of credit balances and make appropriate

reclassification entry, if material.

e. On a selective basis, trace individual account balances in the

aged trial balance to individual subsidiary ledgers and vice versa.

3. Select customer accounts from the aged trial balance for confirmation
proceduresfor
a.Arrange andconfirmation
perform therequests
following:
to be signed by the client and
mailed directly by the auditor. Maintain control over the confirmation
process at all times.
b. Trace balances included in individual confirmation requests to
subsidiary
c. accounts. requests using envelopes with the auditor’s return
Mail confirmation
address.
d. If the client requests exemption from confirmation for any accounts
selected by the auditor, obtain and document satisfactory explanations,
and determine necessity for alternative procedures.

e. Obtain new addresses for confirmation requests returned by the post

office as undeliverable, and re-send. If the number of confirmation
requests returned by the post office is high, determine how the client
updates customer information and how statements are delivered to
customers with incorrect addresses.

f. Send second requests for positive confirmations on which there is no

reply
4. and consider
Process registeredreplies
the confirmation or certified mail for second
and summarize requests
the results of
confirmation
a. procedures
For positive as follows:
confirmation requests to which no reply was received
and accounts exempted from confirmation at the client’s request,
perform alternative procedures for those customers by examining cash
receipts subsequent to the confirmation date. If no cash has been
received, examine sales invoices and corresponding shipping
documents.

b. Indicate the total accounts and balances confirmed without

exceptions,
6. Determine confirmations
whether anyreconciled,
accounts orand non-replies
notes or have
receivable exempted
been
accounts
pledged,
7. with alternative
assigned,
Determine procedures
accounts performed.
or discounted.
whether any or notes receivable are owed by
employees
a. Determineor related parties
the nature andand, if so,ofperform
purpose the following:
the transaction that resulted in
the receivable balance.
b. Determine whether transactions were properly executed and
approved
c. Considerby an official positive
obtaining of the company or therequests
confirmation board ofofdirectors.
such balances.
d. Evaluate the collectability of the balances outstanding.
8. For notes and accounts receivable with maturities greater than one
year,
a. performifthe
Evaluate thefollowing:
principal and interest payments will be collected in
accordance
b. If either interest orcontractual
with their terms. will not be collected in
principal payments
accordance with their contractual terms, determine whether an allowance
for credit loss has been computed.

9. Test the adequacy of the allowance for uncollectible accounts, as

follows:
a. Review subsequent cash collections of account balances.
b. Review accounts written off during the period.
c. Determine if write-offs have been properly authorized and examine
related supporting documentation.
d. Ask the client if there are any collection problems with accounts
receivable currently classified as current assets. If so, consider whether
such accounts should be reclassified to noncurrent assets. Determine the
client’s plans for collection and the probability that the efforts will be
successful.

e. Perform and review ratio analyses for relationships such as

(1) accounts receivable turnover,
(2) allowance for uncollectible accounts to accounts receivable,
(3) allowance for uncollectible accounts to sales, and
(4) accounts written off to sales.
f. Review post-balance-sheet transactions related to receivables,
particularly for discounts taken, credits allowed, and accounts written
off, and determine whether any adjustments should be made as of the
balance-sheet date.
10. If the auditor is concerned about the risk of fraud, audit procedures
suchExpand
a. as the following
the numbershould be considered
of accounts in addition
receivable to the and
confirmations onespursue
listed
above:
all non-replies and discrepancies.
b. Confirm amounts written off that appear unusual, such as write-offs
of
c. balances
Comparedue from
sales continuing
price customers.
to list price.
d. Ascertain that shipped merchandise actually arrived at the
customer’s location and that the merchandise was not shipped to a
warehouse or location controlled by the client.
e. Ascertain that shipping documents and invoices are pre-numbered
sequentially
f. Examine and accounted
original for. for sales invoices and shipping
documents
documents and be alert for possible
g. Telephone customers directly and alterations.
confirm items such as: unusual
payment
h. Review customer complaints and look forside
terms, sales returns, credit memos, agreements,
unusual trends.
merchandise receipt date, or other concerns
j. Look for evidence of salespeople trying to meet or exceed sales
goals
k. in order
Agree dailytocash
achieve quotas
receipts or increase
detail theirstatements
to the bank commissionsand or
bonuses.
investigate
11. unusual
If disclosures lags.fair value are required, or the entity chooses to
about
provide
a. Obtainvoluntary fair value
information aboutinformation, perform
the fair values the following:
of accounts receivable and
notes receivable and determine that the valuation
b. Determine that the fair value amounts are supported by theprinciples are being
consistently
underlying applied under
documentation. IAS.
c. Determine that the method of estimation and significant assumptions
used are properly disclosed