Existence of debtors - audit process, Auditing

Existence of Debtors - Audit Process

The easiest technique to establish the existence of a debtor is to enquire the debtor if he exists. This is done through use of a practice recognise as debtor's circularisation that is basically a direct confirmation from the debtors.

Reason or advantages for circularising debtors are:

1) To acquire confirmatory direct external evidence of the beneficial and existence ownership of the asset debtors.

2) To provide evidence to the figure in the accounts for debtors is a fair or true one.

3) To offer confirmatory evidence to the system of recording and debtors and documenting sales and the controls there on can be relied upon to create an accurate figure for debtors. Normally, tests that are designed to acquire evidence of the reliability of the system are called compliance tests. Therefore Circularisation is useful both for compliance and substantive tests.

4) To give evidence as to the correctness of cut off. Cut off is the technical term required to ensure about in computing profits sales are exactly compared along with the costs of the goods sold. Cut off tests can be substantive that is examining last numbers of documents or compliance such is, whether controls exists their application can be tested.

5) To give evidence on the existence of disputed items.

Posted Date: 1/28/2013 12:19:35 AM | Location : United States







Related Discussions:- Existence of debtors - audit process, Assignment Help, Ask Question on Existence of debtors - audit process, Get Answer, Expert's Help, Existence of debtors - audit process Discussions

Write discussion on Existence of debtors - audit process
Your posts are moderated
Related Questions
General advantages and disadvantages of joint audits Advantages: All work and fees are welcome to audit firms. An opportunity to closely inspect the auditing methods

Cash and Window Dressing - Building Society Cash Possibility of misappropriation and error usually accompany the handling of cash. Building societies transactions towards

Communication with the expert If the auditor intends to use the work of an expert then he must communicate with the expert well in advance to confirm the terms of engagement an

Principles of Auditors Procedures i. The financial statements should be prepared on the source of conditions existing on the balance sheet date. ii. The material post balance

Q. What is Withholding Allowance? Withholding Allowance -Every taxpayer is allowed to claim a withholding allowance, which exempts a certain amount of wages from being subject

Procedures When Fraud is suspected Whenever the auditor encounters situation that might indicate that there is a material mis-statement in the financial statements resultant fr

Valuation - Long Term Contracts The basis of valuation should be cost plus attributable profit as benefits less foreseeable losses and progress payments both receivable and re

Questionable Payments In some countries, business is often gained by bribing ministers or public officials or officers of companies or firms with whom one wishes to do business

Audit points - Audit Process Key audit points are as 1. Internal control particularly along with regard to computerisation and internal audit.  2. Provision for doubtful

(i) Overview of the audit process (a) Identify the key steps in this framework/ concept. (b) Briefly explain each of the key steps, in your own words. (ii) Framework of cr