(d)
(i) Receivables circularisation – procedures
– Obtain a list of receivables balances, cast this and agree it to the receivables control account total at the end of the year. Ageing of receivables may also be verified at this time.
– Determine an appropriate sampling method (cumulative monetary amount, value-weighted selection, random, etc.) using materiality for the receivable balance to determine the sampling interval or number of receivables to include in the sample.
– Select the balances to be tested, with specific reference to the categories of receivable noted below.
– Extract details of each receivable selected from the ledger and prepare circularisation letters.
– Ask the chief accountant at Seeley Co (or other responsible official) to sign the letters.
– The auditor posts or faxes the letters to the individual receivables.
|
