In statutory Audit Profile, How do you check Debtors

Question

Accepted Answer

In statutory audit, debtors are checked by verifying the accuracy of the debtor's ledger, confirming balances with customers, and assessing the collectability of outstanding debts.

Verify the accuracy of the debtor's ledger by reconciling it with the general ledger.
Confirm balances with customers through direct communication or third-party confirmations.
Assess the collectability of outstanding debts by analyzing payment history, customer creditworthiness, and economic conditions.
Perform analytical procedures to identify any unusual or significant fluctuations in debtor balances.
Review the aging schedule of debtors to identify any potential risks or issues.
Evaluate the adequacy of the provision for doubtful debts or bad debts.
Consider any subsequent events or transactions that may impact the collectability of debts.
Document the audit procedures performed and the conclusions reached in the audit working papers.

Accepted Answer

As Debtor is a balance sheet item, to check Debtors you have to take Balance Confirmation from potentially debtors. This Confirmation should be not biased, hence it should be directly taken by auditor from debtors.

In statutory Audit Profile, How do you check Debtors

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