Audit plan for testing accounts receivables and revenues.

Step1 Reconcile and Select specific balances for confirmation (I remember the first step of audit plan is reconciliation, including the teacher’s )

a) Obtain the accounts receivable subsidiary balances (aged by customer, if possible) and trace totals to the comparative summary of accounts receivable balances (GL accounts). Reconcile the total balance to the general ledger control account balance.

b) Select a sample of customer balances from the year-end accounts receivable subsidiary ledger. Trace the items to sales order and sales invoice, and meanwhile check the existence of these supporting documents - a key step to find the services and customer created fictitiously by Satyam.

c) Examine authorization for any significant adjustments made throughout the year.
Step2 Prepare and send confirmation a) Arrange for confirmation requests to be signed by the client and mailed directly by the auditor. Maintain control over the confirmation process at all times.
The auditing team relied on Satyam management to send confirmation requests for accounts receivable for 2006 and 2007 audits.

b) Second requests and, where warranted, third requests should be mailed when responses to positive confirmation requests have not been received within a reasonable time. If the client requests exemption from confirmation for any accounts selected by the auditor, obtain and document satisfactory explanations.
The auditing team never receives any responses to the confirmation requests from the customers, but they made no attempt to follow-up on the non-responses with second confirmation requests.

c) Summarize confirmation