Performing Tests of Balances Series Part 3 - Auditing Accounts Receivable

Date: 1/13/2025
Time: 12:00 PM - 2:00 PM EST
CPE Credit: 2 hours

Learning “how” to audit accounts receivable is mainly learning to “what extent” auditing procedures should be applied. The cause of much over-auditing on many engagements, the amount of audit work necessary depends on risk of material misstatement (RMM) evaluations at both the financial statement and classification (assertion) levels. In other words, we can’t default to performing all procedures in the hope we’ll compensate for all risks or complete the job efficiently! For example, when RMM is low at the financial statement and assertions level for accounts receivable, substantive procedures may be significantly reduced. Substantive procedures may, in these circumstances, consist of some analytical procedures and the most efficient confirmation procedures.

Topics Covered

• Understanding the maximum required procedures for auditing accounts receivable
• Learning how to perform only the procedures that are required based on the applicable assessed levels of RMM

Learning Objectives:

• Understand the basic procedures for auditing accounts receivable
• Understand the affects of assessed levels of risk of material misstatement on accounts receivable auditing procedures
• Learn ways to audit account receivable more efficiently
• Be able to design and prepare the most efficient documentation of accounts receivable auditing procedures