Staley Construction Company
Audit Program - Accounts Receivable
June 30, 2015

AUDIT PROCEDURES

TEST OF BALANCES 1. Gather an aged listing of accounts receivable as of year-end. 1. foot the listing and crossfoot totals. 2. trace total of aged receivables to the general ledger. 3. trace entries for individual customers from the aging analysis to the individual accounts in the accounts receivable subsidiary records. 1. Perform confirmations of accounts receivable. Verify by confirmation or alternative means all accounts selected for confirmation. 1. determine sample size for confirmation testing. 2. select individual accounts for confirmation testing. 3. evaluate differences between receivable balances and confirmation responses. 4. generalize misstatements to the population of accounts receivable and evaluate acceptability of the population. 1. Analyze allowance for bad debts. 1. discuss with management whether the allowance amount is adequate. 2. review payments received after year-end. 3. prepare an analysis of the allowance account and compare to the general ledger. 1. Investigate any material credit balances and reclassify as accounts payable. 2. Review control account for unusual postings. 3. Physically inspect all notes receivable in the client’s possession. 4. Review meeting minutes, agreements, and bank confirmation to determine if any accounts or notes have been assigned, pledged, or discounted. 5. Review accounts receivable cut-off. 6. Trace subsequent receipts to outstanding accounts receivable.

ANALYTICAL PROCEDURES 1. Analyze the relationship between receivables and sales, and compare with relationships for the preceding years. 2. Review the aged accounts receivable trial balance and compare to prior periods. 3. Compare sales