AUDITRIBE
PRACTICAL AUDIT GUIDE

Accounts Receivable

Assess whether customer balances, collections, credit decisions and adjustments are properly controlled and accurately recorded.

Key Risks

  • Overdue or unrecoverable debts
  • Unauthorised credit sales
  • Misapplied customer receipts
  • Unapproved write-offs or credit notes
  • Incorrect customer balances

Documents & Data

  • Customer master file
  • Accounts receivable ageing
  • Sales invoices
  • Receipt records
  • Credit limits and approvals
  • Credit notes
  • Customer statements

Key Controls

  • Approved credit limits
  • Customer master controls
  • Daily receipt reconciliation
  • Ageing review
  • Credit note/write-off approval
  • Customer statement reconciliation

Practical Audit Procedures

  1. Analyse ageing by customer and identify overdue or unusual balances.
  2. Test credit sales against approved limits and terms.
  3. Trace customer receipts to bank and customer accounts.
  4. Review credit notes and write-offs for approval and supporting reason.
  5. Confirm selected customer balances or reconcile statements.
  6. Review inactive customers, duplicate accounts and unusual master changes.

Questions to Ask

  • What could prevent this process from achieving its objective?
  • Which controls are considered critical, and who owns them?
  • What evidence shows the controls actually operated during the period?
  • What exceptions, incidents or recurring problems occurred?
  • What has management changed since the last review?

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