ASRE 2410 - Review of an Interim Financial Report Performed by the Independent Auditor of the Entity - April 2006
ReceivablesReceivables
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Receivables
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Enquire about the accounting policies for initially recording trade receivables and determine whether any allowances are given on such transactions.
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Obtain a schedule of receivables and determine whether the total agrees with the trial balance.
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Obtain and consider explanations of significant variations in account balances from previous periods or from those anticipated.
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Obtain an aged analysis of the trade receivables. Enquire about the reason for unusually large accounts, credit balances on accounts or any other unusual balances and enquire about the collectibility of receivables.
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Discuss with management the classification of receivables, including non-current balances, net credit balances and amounts due from shareholders, those charged with governance and other related parties in the interim financial report.
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Enquire about the method for identifying “slow payment” accounts and setting allowances for doubtful accounts and consider it for reasonableness.
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Enquire whether receivables have been pledged, factored or discounted.
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Enquire about procedures applied to ensure that a proper cut-off of sales transactions and sales returns has been achieved.
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Enquire whether accounts represent goods shipped on consignment and, if so, whether adjustments have been made to reverse these transactions and include the goods in inventory.
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Enquire whether any large credits relating to recorded income have been issued after the balance sheet reporting date and whether provision has been made for such amounts.