TERM 1
Receivables Substantive Procedures
DEFINITION 1
1. Obtain an aged listingof AR from the client & foot/crossfoot2.
Vouch a sample of debits to supporting documentation3. Confirm a
sample of AR with customers4. Evalu ate the client's provision for
uncollectible AR5. Perform analytica l procedures for AR6. Evaluate
the overall presentation of AR in Fin S tatements7. Review
subsequent receipts
TERM 2
1. Obtain an aged listing of AR from the client
DEFINITION 2
Foot (Total) and Cross-foot (sub-total) the aged listing, agree
totals to client's trial balanceValuation
TERM 3
2. Vouch a sample of debits to supporting
documentation
DEFINITION 3
Existence.Secondary:Rights & Obligations, Valuation
TERM 4
3. Confirm a sample of AR with customers
DEFINITION 4
Mostly existence; all but P+DConfirmation of receivables is
not required, but must document reasons why if you
don't.Most cost-effective procedure for existence
assurance.Subsequent Receipts is most cost-effective for
Completeness/Value.
TERM 5
3a. Confirmation: A deeper
look
DEFINITION 5
Closer to year end, the lower the DR . Positive confirmation & More
accounts for a lower DR.Positive v Ne gative confirmation
Must reconcile differences between amnt on confirmation and
reply - timing differences are a likely explanation
Good reasons not to:
AR are immaterial, historically don't re spond, inherent risk AND
control risk are low
All requests mailed in envelope bearin g CPA firm's address (self-
addressed)
