Accounts Receivable - Get as Excel by 74m5iQ

VIEWS: 126 PAGES: 15

									This is the AuditNet Standard Risk Control Audit Matix which incorporates formats
used by many audit organizations in their documentation working papers. There are
format templates for risk control, audit procedures, questionnaires and checklists.
There is a blank workpaper and a report summary that can in used by audit
organizations. AuditNet has prepared a monograph for guidance on preparing and
developing audit work programs, checklists, questionnaires and matrices. The
monograph is available to AuditNet subscribers. For more information go to
www.auditnet.org
Audit Program Area: Accounts Receivable

                                                  AUDIT PROCEDURES                                                   WP Ref

          Pre-fieldwork
          Documentation or efiles to obtain:
          Current Copy of Policies and Procedures
          Contact information for key process owners
          SOX documentation (process flows, narratives, test scripts, etc)
          Obtain applicable reports to facilitate testing



                                                    Project Work Steps
          Planning
          Create & Send Audit Notification Letter (3 to 4 weeks out)
          Develop & Send Audit Planning Memo (2 to 3 weeks out)
          Develop an Audit Work Program
          Review data files, prior audits, prior SOX documentation, etc to familiarize yourself with operations
          Make Travel Arrangements if required (hotel, transportation, flight, etc)




                                                    Project Work Steps
          Fieldwork/Testing
                                               Accounts Receivable (A-G)
          A. Gain an understanding of and document the procedures and controls related to the following:
          1. Interview relevant parties to the process.
          2. Define terms relevant to accounts receivable.
          3. Reserve and chargeback methodologies.
          4. Bad Debt write-off policies.
          5. A/R timing, completeness, and accuracy issues
          6. System access for A/R-related responsibilities
          7. Process for handling live checks received at Corporate (storage?, sent to lockbox?, timeliness of
          deposit?, authorizations needed?, etc)



          B. Accounts Receivable
          1. Test a sample of ## cash receipts and ensure timely, accurate posting compliant with policy. Trace to
          bank statements and source invoices.
          2. Verify timely and accurate reconciliation of A/R subledger to Generl Ledger. Review most recent two
          months' month-end reconciliations and select 10 random days from test period and review.
          3. Review aging of customer accounts for balances over 60 days and/or greater than 5% of total AR.
          4. Identify high balance customer accounts.
          5. Ensure proper segregation of duties within AR function.
C. Credit and Collections
1. Test a sample of ## credit memos issued for proper approval and accuracy of amount.
2. Obtain customer credit application file and verify adherence to credit approval policy.
3. Ensure all uncollected balances are identified and adequately explained.
4. Reveiw payment discrepancies (short-paid invoices) for unusual amounts or activity.
5.


D. Reserves and Chargebacks
1. Recalculate reserve balance per policy.
2. Review chargebacks for reasonableness.
3.
4.
5.


E. Overdue Accounts and Bad Debt Policy
1. Test a sample of ## bad debt write-offs for proper approval and adherence to policy.
2. Review all write-offs for any unusual amounts or suspicious activity.
3. Test overdue accounts for collection of interest/penalties.
F. AR Fraud Testing
1. Test for Lapping Cash
   - look for large changes in A/R turnover by customer, compare this year to last year.
   - confirm major customer A/R balances
   - Search for all customers with equal credits and debit adjustments to their account. The credit
     would be for an old invoice and the debit would be to record a new invoice.
2. Test for Fraudulent Adjustments
   - compare write-off this year to last year by customer
   - Search for duplicate cash receipts that were later credited. Ensure these refunds were sent to the
     customer
   - Extract all round dollar adjustments and review the relative number of round dollar adjustments.




G. Customer Master File
1. Obtain list of employees with ERP system access to customer master file.
2. Test a sample of ## customers for consistency of credit limit in system with approved amount.
3. Trace sampled customer data to current sales contract and ensure consistency of terms, etc.
4.



H. Unapplied Cash
Obtain file of unapplied cash. Analyze the file for age in total and by customer. Inquire with business
owner on significantly aged items.
I. Live Check Testing
Obtain the live check log. Review
Misc (G)


Project Work Steps
Reporting
Discuss audit findings with Management
Create a draft report detailing the results of the audit and any applicable recommendations
Edit check the report
Issue the report


customer sales balances that exceed the credit limit
Summarize all a/r write-offs by customer. Look to make sure no trends, especially right after year end (might be ind
Summarize all a/r credits by customer. Look to make sure no trends, especially right after year end (might be indic
Auditor    Time      Date     Date           Checked
Initials   Spent   Expected Finished Remarks   By:
ght after year end (might be indicator of fictitious sales)
after year end (might be indicator of fictitious sales)
                              Client Name
                      Internal Control Framework

          Date Completed:
          Completed By:
          Reviewed By:

          Question                                                  Yes No* Comments /Description




              To the best of my knowledge, the answers and comments noted above are accu



          Name and Title of Person Completing Form (please print)                            Name and Title of Department Dire


* For a “No” answer, cross-reference to either a compensating control or to audit work which has been performed
or is to be performed.                            Questionnaire
                   Signature of Person Completing Form                                                Signature of Department


                             7/4/2012
                          Date Form Completed                                                     Date of Department Directo




* For a “No” answer, cross-reference to either a compensating control or to audit work which has been performed
or is to be performed.                            Questionnaire
                           Employee Responsible for Task




s noted above are accurate and reflect the current



Name and Title of Department Director (please print)


            * For a “No” answer, cross-reference to either a compensating control or to audit work which has been performed
            or is to be performed.                            Questionnaire
   Signature of Department Director



Date of Department Director's Signature




      * For a “No” answer, cross-reference to either a compensating control or to audit work which has been performed
      or is to be performed.                            Questionnaire
Finding Ref #   Control Testing   Finding
Management Response & Treatment

								
To top